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DATE: |
December 10, 2024 |
38 |
SUBJECT
Title
FISCAL YEAR 2024-25 FIRST QUARTER OPERATIONAL PLAN STATUS REPORT AND BUDGET ADJUSTMENTS (DISTRICTS: ALL)
Body
OVERVIEW
This report summarizes the status of the County’s Fiscal Year 2024-25 Adopted Operational Plan, as measured by projected year-end fund balance from current year operations. The projected year-end balance for the General Fund is $58.6 million (or 0.7% of the General Fund budget), and $97.0 million (or 0.9% of the Overall budget) for all budgetary funds combined. The projected fund balance anticipates an overall positive expenditure variance and an overall negative revenue variance from the Fiscal Year 2024-25 Amended Budget. The projection reflects the conservation of appropriation for contingency pursuant to Government Code §29084 and assumes General Purpose Revenue will perform better than estimated, and all business groups will produce operating balances. The projected balance for all other funds combined is $38.4 million (1.3% of the other funds combined budget).
Transfers and revisions to the amended budget can be made by formal action of the Board of Supervisors in accordance with the California County Budget Act, Government Code (GC) Section 29125. Increases to the overall budget require 4 votes. Transfers of appropriations between departments within the same budgetary fund that do not increase the overall budget, or the cancellation of appropriations require a majority vote. Transfers of appropriations to facilitate transfers between budgetary funds require 4 votes even if the overall budget is not increased.
In the Public Safety Group (PSG), recommendations include appropriation adjustments for the purchase of one fire engine to support fire and emergency medical services and for law enforcement training on best practices of de-escalation tactics.
In the Health and Human Services Agency (HHSA), recommendations include appropriation adjustments to support recent enhancements to key staffing capabilities and to utilize a lost revenue strategy under the final American Rescue Plan Act (ARPA) guidance for the ARPA Framework Components.
In the Land Use and Environment Group (LUEG), recommendations include appropriation adjustments for expenditures related to strengthening the County of San Diego's Hazardous Materials Business Plan information and Disaster Recovery, to provide funding for improvements and maintenance to various county parks, for Palomar Landfill and Landfill Gas Assessments, to fund Road Resurfacing projects, to provide high-speed internet access in schools, for the Rainbow Water Quality Improvement Project, for road station facility improvement projects, to support the construction costs of Mira Mesa Epicentre Project, and allocation for various reservoirs to remain open and continue providing recreation services.
In the Finance and General Government Group (FGG), recommendations include appropriation adjustments for one-time expenses in the Board of Supervisors’ offices, to align budget with anticipated actuals for Casa de Oro Park, for Jacumba Fire Station #43, and the upgrade of the County’s budgeting system, for Integrated Property Tax System mainframe integration costs, for the Neighborhood Reinvestment Program, for the Community Enhancement Program and for small business outreach, procurement, technical assistance, and bonding activities.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Accept the Fiscal Year 2024-25 first quarter report on projected year-end results.
Increases to the Overall Budget and/or Transfers Between Budgetary Funds (Recommendations 2 through 25):
2. Establish appropriations of $1,000,000 in San Diego County Fire, Transportation Equipment, for the purchase of one fire engine to support fire and emergency medical services in the San Diego County Fire Protection District, based on the Operating Transfers In from the San Diego County Fire Protection District, Fire Mitigation Fund. (4 VOTES)
3. Establish appropriations of $250,000 in the District Attorney’s Office, State Asset Forfeiture Fund, Services & Supplies, for expanded law enforcement training on best practices of de-escalation tactics based on available prior year State Asset Forfeiture fund balance. (4 VOTES)
4. Establish appropriations of $39,972 in the Department of Environmental Health and Quality, Services & Supplies, for expenditures related to strengthening the County of San Diego's Hazardous Materials Business Plan information and Disaster Recovery, based on unanticipated revenue from Environmental Public Health and Emergency Response grant funds for the project period of September 1, 2024 through August 31, 2025. (4 VOTES)
5. Establish appropriations of $2,000,000 in the Capital Outlay Fund for Capital Project 1025566 Lindo Lake Improvements Phase II, to provide funding for improvements to the West Basin at Lindo Lake County Park, based on a grant awarded to the Department of Parks and Recreation by the San Diego River Conservancy. (4 VOTES)
6. Transfer appropriations of $679,000 within Department of Parks and Recreation, Services & Supplies to Operating Transfers Out; and establish appropriations of $679,000 in the Capital Outlay Fund for Capital Project 1021901 Dos Picos Park Playground School Age Playground Equipment ($91,000), Capital Project 1022932 Dos Picos Park Small Preschool Playground Equipment Replacement ($68,500), Capital Project 1022933 Steele Canyon County Park Playground Equipment Replacement ($97,500), Capital Project 1021149 FY1718 Parks Playground Equipment for Hillsdale ($379,000), and Capital Project 1022931 Lindo Lake County Park B Playground Equipment Replacement ($43,000) to fund the construction of playground equipment replacements at various parks, based on an Operating Transfer In from the General Fund. (4 VOTES)
7. Establish appropriations of $30,000 in the Capital Outlay Fund for Capital Project 1021904 Stelzer Park Ranger Station and Visitor Center, to provide funding for improvements to the station, based on available Stelzer Trust Fund fund balance. (4 VOTES)
8. Establish appropriations of $20,000 in the Department of Parks and Recreation, Services & Supplies, to provide funding for maintenance projects to install alarms for the new office at Stelzer Park, based on available Stelzer Trust Fund fund balance. (4 VOTES)
9. Establish appropriations of $888,000 in the Department of Parks and Recreation, Services & Supplies, to provide funding for maintenance projects at Waterfront Park based on available prior year Waterfront Trust Fund fund balance. (4 VOTES)
10. Establish appropriations of $150,000 in PLDO Area 40 Palomar/Julian, Services & Supplies, to provide support for the construction of Julian Town Square, based on available prior year PLDO Area 40 Palomar/Julian Fund fund balance. (4 VOTES)
11. Transfer appropriations of $1,700,000 within Department of Public Works General Fund, Services & Supplies to Operating Transfers Out; and establish appropriations of $1,700,000 in Inactive Waste Site Management Fund, Services & Supplies, for Palomar Landfill and Landfill Gas Assessments, based on an Operating Transfer In from the General Fund. (4 VOTES)
12. Establish appropriations of $24,050,000 in the Department of Public Works Road Fund, Services & Supplies, to fund Road Resurfacing projects, based on available prior year Road Fund fund balance. (4 VOTES)
13. Establish appropriations of $1,300,000 in the Department of Public Works General Fund, Services & Supplies, for a grant award to provide high-speed internet access in schools, based on unused revenue for previously designated for broadband projects within the Department of Public Works, General Fund. (4 VOTES)
14. Transfer appropriations of $2,030,000 within Department of Public Works General Fund, Services & Supplies to Operating Transfers Out; and establish appropriations of $2,030,000 in Department of Public Works Road Fund, Services & Supplies, for the Rainbow Water Quality Improvement Project, based on an Operating Transfer In from the General Fund. (4 VOTES)
15. Establish appropriations of $297,273 in the Department of Public Works Road Fund, Services & Supplies, for road station facility improvement projects, based on available prior year Road Fund fund balance. (4 VOTES)
16. Establish appropriations of $848,804 in Board of Supervisors, including District 1 ($200,000), District 2 ($52,471), District 3 ($196,333), District 4 ($200,000), and District 5 ($200,000), Services & Supplies, for one-time expenses based on over-realized General Purpose Revenue from Property Tax Prior Secured Supplemental. (4 VOTES)
17. Transfer appropriations of $1,080,000 from the Capital Outlay Fund and related Operating Transfers In, to the Library Fund to provide funding for Capital Project 1020105, Casa de Oro Library, to align budget with anticipated actuals, based on transfer from Capital Project 1026157, Casa de Oro Park Amenities. (4 VOTES)
18. Establish appropriations of $700,000 in the Capital Outlay Fund for Capital Project 1022910, Jacumba Fire Station #43, based on an Operating Transfer In from San Diego County Fire Protection District. (4 VOTES)
19. Transfer appropriations of $4,935,160 from Finance Other - Countywide General Expense, Services & Supplies, to Finance and General Government Group Executive Office, Services & Supplies, for necessary upgrade of the County’s budgeting system to align budget with anticipated actuals based on existing General Purpose Revenue. (4 VOTES)
20. Establish appropriations of $1,337,282 in Finance and General Government Group Executive Office, Services & Supplies, for Integrated Property Tax System mainframe integration costs based on previously assigned General Fund fund balance. (4 VOTES)
21. Establish appropriations of $308,000 in Finance and General Government Group Executive Office - Economic Development & Government Affairs, Salaries & Benefits ($108,000) and Services & Supplies ($200,000), for small business outreach, procurement, technical assistance, and bonding activities based on Purchasing ISF revenues and available prior year Purchasing ISF fund balance. (4 VOTES)
22. Transfer $15,000 from the Neighborhood Reinvestment Program budget (Org 15660 for District 3), Services & Supplies, to Contribution to County Library, Operating Transfers Out, to allocate for the purchase of backpacks, books, and school supplies; and establish appropriations of $15,000 in the County Library, Services & Supplies, for the purchase of backpacks, books, and school supplies based on an Operating Transfer In from the General Fund. (4 VOTES)
23. Establish appropriations of $32,363 in the Community Enhancement Program budget (Org 12900) based on the return of unused portions of prior year allocations so the funds can be allocated to other projects. (4 VOTES)
24. Establish appropriations of $46,365 in the Neighborhood Reinvestment Program budget ($29,232 in Org 15650; $15,380 in Org 15655; $1,433 in Org 15660; and $320 in Org 15665) based on the return of unused portions of prior year allocations so the funds can be allocated to other projects. (4 VOTES)
25. Transfer appropriations within departments between Services & Supplies and Operating Transfers Out, as noted in Appendix C, in the net amount of $29,521,915 for major maintenance projects listed in Appendix C that were subsequently reclassified, based on capitalization thresholds, for financial reporting purposes; and establish, transfer and cancel appropriations, as noted in Appendix C for a net increase of $29,521,915 in the Major Maintenance Capital Outlay Fund and adjust related funding sources as noted to accurately classify major maintenance projects for financial reporting purposes. (4 VOTES)
Transfers Within Budgetary Funds and/or Cancellation of Appropriations (Recommendations 26 through 32):
26. Transfer appropriations of $230,325 from Health and Human Services Agency, Salaries & Benefits, to the Chief Administrative Office, Salaries & Benefits, to support recent enhancements to key staffing capabilities, based on General Purpose Revenue.
27. Direct the Chief Administrative Officer to ensure maximum use of American Rescue Plan Act (ARPA) funding based on obligation and expenditure deadlines (December 31, 2024 and December 31, 2026, respectively) by utilizing a lost revenue strategy and a revenue transfer strategy as outlined below, and to make associated appropriation adjustments in future quarterly status updates if necessary.
a. Approve the use of the lost revenue strategy under the final ARPA guidance as needed to fund up to $13,000,000 in General Relief costs in the Health and Human Services Agency by redirecting previously allocated General Purpose Revenue (GPR) for Board approved ARPA Framework components.
b. Transfer revenue of up to $50,000,000 as needed, all in Intergovernmental Revenue, based on ARPA Revenue to replace previously allocated GPR and/or Realignment revenue for items eligible for use of ARPA including locally funded Behavioral Health Services costs and other existing costs as identified. The available GPR and/or Realignment revenue of up to $50,000,000 will be used to fund Board approved ARPA Framework components.
28. Transfer appropriations of $1,000,000 within the Capital Outlay Fund and related Operating Transfer In from the General Fund, to provide funding for Capital Project 1024823 Mira Mesa Epicentre to support the construction costs, based on transfer from Capital Project 1021910 Sage Hill Staging Area.
29. Transfer appropriations of $188.92 within the Capital Outlay Fund and related Operating Transfer In from the General Fund to provide funding for Capital Project 1021906 Jess Martin Park Water Conservation to close out the Capital project based on transfer from the General Fund (MMISF 1027157 Jess Martin Park Walkway Improvement).
30. Cancel appropriations of $37,489.97 and related Operating Transfer In from the General Fund in the Multiple Species Conservation Program Acquisition Fund to properly record related non-capital pre-acquisition expenses; and transfer appropriations of $37,489.97 from the Contribution to Capital Outlay Fund, Operating Transfers Out to the Department of Parks and Recreation, Services & Supplies, to properly record related non-capital pre-acquisition expenses.
31. Approve the Insurance Internal Service Fund to earn and retain its own interest.
32. Allocate $59,000 from Department of Parks and Recreation, Services & Supplies, to the City of San Diego to support Lake Hodges, Lake Sutherland, and El Capitan reservoirs to remain open and continue providing recreation services to the public in Fiscal Year 2024-25. Funding will occur upon successful negotiation of a memorandum of understanding with the City of San Diego.
EQUITY IMPACT STATEMENT
After the Board of Supervisors adopts the Operational Plan, it is monitored by the departments, Groups, and the Board. Departments are expected to work within their respective budgets. Budgets may, however, be modified during the year as circumstances warrant. In conjunction with the fund balance projection process, the Chief Administrative Officer meets with each Group to review accomplishments, emergent issues, and budget status. Department heads are required to communicate any potential problems or errors to the appropriate authority. Groups complete fund balance projections quarterly providing explanations of significant variances of their budget. The recommended actions are intended to provide resources to address inequities in County services and to identify disparities, develop meaningful outcomes, and create a County government culture of equity, belonging, and racial justice.
SUSTAINABILITY IMPACT STATEMENT
Today’s actions support the sustainability measures across the County considering the environment, economy, health/wellbeing, and/or social aspects of the community by aligning the County’s available resources with services to maintain fiscal stability and ensure long-term solvency.
FISCAL IMPACT
Funds associated with today’s recommendations are partially included in the Fiscal Year 2024-25 Operational Plan. If approved, in the General Fund these actions will result in an increase to the overall budget of $5,820,786, transfers between budgetary funds of $28,597,941, transfers within budgetary funds of $9,589,485, and no cancellation of appropriations. The funding sources for the increases are based on previously assigned General Fund fund balance ($1,337,282), unused revenue for previously designated broadband projects ($1,300,000), Operating Transfer In from San Diego County Fire Protection District ($1,000,000), Waterfront Trust Fund ($888,000), over-realized General Purpose Revenue ($848,804), Purchasing ISF and available prior year Purchasing ISF fund balance ($308,000), unused portions of prior year allocations for Community Enhancement and Neighborhood Reinvestment Program ($78,728), Environmental Public Health and Emergency Response grant ($39,972), and Stelzer Trust Fund ($20,000).
In all other funds combined, these actions will result in a net increase to the overall budget of $61,385,698, transfers between budgetary funds of $2,003,974, transfers within budgetary funds of $1,000,189, and cancellation of appropriations of $1,866,052. The funding sources for the net increase are Operating Transfers In from the General Fund ($33,084,451), available prior year Road Fund fund balance ($24,347,273), San Diego River Conservancy ($2,000,000), Operating Transfers In various non-General Fund ($823,974), Operating Transfer In from San Diego County Fire Protection District ($700,000), available prior year State Asset Forfeiture fund balance ($250,000), available prior year PLDO Area 40 Palomar/Julian Fund fund balance ($150,000), and Stelzer Trust Fund ($30,000).
BUSINESS IMPACT STATEMENT
N/A
Details
ADVISORY BOARD STATEMENT
N/A
BACKGROUND
As shown in Schedule A, the General Fund year-end fund balance projection of $58.6 million is based on the estimate that expenditures will be approximately $95.1 million less than the Fiscal Year 2024-25 Amended Budget and revenues will be a net $36.5 million less than the Fiscal Year 2024-25 Amended Budget. The Amended Budget consists of the Adopted Budget plus encumbrances carried over from the prior year, plus year-to-date changes that have been either approved by the Board or the Chief Financial Officer, when permitted. The projected balance for all other funds combined is a net of $38.4 million.
The General Fund year-end fund balance projection includes COVID-19 response costs primarily funded through American Rescue Plan Act (ARPA) funds and anticipates receipt of additional Federal Emergency Management Agency (FEMA) revenue to cover costs incurred. Total FEMA costs are currently estimated at $438.7 million. This includes $436.3 million of costs incurred from the beginning of the pandemic through May 11, 2023, when FEMA eligibility ended and $2.4 million for Fiscal Year 2024-25 for allowable administrative costs to manage the grant beyond the FEMA eligibility date. To date, a total of $274.2 million in FEMA reimbursement payments have been received and projections anticipate receiving an additional $22.1 million by December 31, 2025, for prior year efforts. The remaining balance of $142.4 million, which includes the 10% withhold amount as part of the FEMA close out process, is anticipated to be received in future fiscal years.
Attachments to this letter have been included to provide detail of these fund balance projections. Schedule A summarizes the fund balance projection by business group, department, and fund category. Schedule B shows the projected General Fund fund balance by business group split between operating and reserve balances. The Notes to Schedules A and B explain variances from budget by department, fund and for General Purpose Revenue.
GENERAL FUND EXPENDITURE VARIANCES
The projected lower than budgeted expenditures generating an overall positive expenditure variance of $95.1 million in the General Fund are primarily attributable to the following:
• $15.6 million in projected overall positive Salary & Benefits appropriation variance. As of September 30, 2024, the vacancy rate (including newly added positions) was 7.1% (1,450 of 20,488 positions).
o In PSG, the projected overall positive expenditure variance of $2.3 million is primarily due to attrition, vacant and modified positions.
o In HHSA, the projected overall positive expenditure variance of $9.3 million is attributed to longer timeframes to hire staff, including hard to recruit classifications and vacancies due to attrition.
o In LUEG, the projected overall positive expenditure variance of $2.5 million is primarily due to vacancies and under-filled positions.
o In FGG, the projected overall positive expenditure variance of $1.5 million is primarily attributed to attrition and vacant positions.
• $56.9 million in projected positive appropriation variance in Services & Supplies across the County.
o In PSG, projected overall positive expenditure variance of $1.8 million primarily in Department of Child Support Services due to lower than anticipated expenses in various accounts supporting operations, such as information technology and contracted services.
o In HHSA, projected overall positive variance of $46.4 million in various departments. This consists of positive variances in:
§ Behavioral Health Services (BHS) primarily due to contracted services associated with a range of mental health and substance use disorder programs to align with anticipated spending which adjusts for contractor staffing vacancies and projected utilization in residential bed days;
§ Public Health Services (PHS) primarily from procurement delays associated with identification and timing of equipment delivery, installation, and validation testing, lesser use of contracts in Immunizations to align with the Immunization Action Plan (IAP) grant resources and workplan, and overall anticipated contract spending in various public health programs, and $2.0 million in Temporary Contract Help associated with the demobilization of COVID-19 associated activities;
§ Aging & Independence Services (AIS) tied to lesser use in contracted services in Home Safe and California Department of Aging (CDA) programs by utilizing internal County staffing to support the programs and the roll out of Modernizing Older California Act (MOCA) programs over future fiscal years, an adjustment to align the budget to the anticipated In-Home Support Services (IHSS) Maintenance of Effort (MOE) for IHSS Individual Providers, and due to the phased implementation needed to accommodate the increasing number of participants in the San Diego Veterans Independence Service at Any Age (SD-VISA) program;
§ Homeless Solutions and Equitable Communities (HSEC) primarily to align projected spending for the CDC Community Health Worker Resilient grant, projected lower costs tied to the Community Services Block Grant (CSBG) Communities in Action program, and overall contracts savings primarily tied to outreach, conflict resolution, and refugee support services that were carried forward from prior year;
§ Administrative Support primarily tied to a variance from budget in information technology (IT) related costs.
These are offset by a negative variance in Self-Sufficiency Services (SSS) primarily due to increases in contracted services based on revised allocations for CalWORKs Housing Support Program due to California Department of Social Services redistribution of unspent prior year funding.
o In LUEG, projected overall positive variance of $4.8 million primarily in the Department of Planning & Development Services (PDS) primarily due to schedule changes to one-time only IT projects and reduced consultant contract spending and in Department of Environmental Health and Quality (DEHQ).
o In FGG, projected overall positive variance of $3.7 million primarily in Registrar of Voters (ROV) due to delays associated with an IT project for a new voter registration system and lower than anticipated ballot printing costs and in County Counsel due to the completion of a facilities construction project at lower than expected costs.
o In Finance Other (FO), projected overall positive variance of $0.2 million due to projected savings in one-time funding related to IT services that are no longer anticipated to be needed.
• A projected positive appropriation variance of $4.9 million in Other Charges primarily (HHSA) in Self-Sufficiency Services tied to Participant Benefits programs mainly in Child Care Stage 1 due to revised projected caseloads and in EBT Skimming mainly tied to estimated EBT Fraud payments, in Child and Family Well Being (CFWB) mainly to align with the revised projected caseloads in assistance programs, and in Housing & Community Development Services (HCDS) primarily in HOME Tenant Based Rental Assistance (TBRA) due to lower-than-anticipated referral and a gradual transition in enrolling newly eligible participants under the Transitional Aged Youth (TAY) program.
• $15.0 million budgeted for appropriations for contingency pursuant to Government Code §29084 is projected to be unspent at year-end in Capital Asset/ Land Acquisition.
• A projected positive appropriation variance of $3.9 million in Capital Assets Equipment in HHSA primarily in Public Health Services (PHS) associated with longer than anticipated delivery of equipment.
• A projected negative appropriation variance of $1.9 million in Expenditure Transfer & Reimbursements in FGG primarily in ROV due to delayed IT project and in County Counsel due to less than anticipated reimbursements for staff costs in the health services area.
• A projected positive appropriation variance of $0.7 million in Operating Transfers Out in HHSA primarily in AIS due to reduced funding needs for the IHSS Public Authority related to anticipated operational needs in the program with no impact to services.
GENERAL FUND REVENUE VARIANCES
The projected under-realized revenue of $36.5 million includes positive variances totaling $22.8 million and negative variances of $59.3 million. In many instances, the negative revenue variances are directly associated with the positive expenditure variances described above.
The projected positive revenue variance of $22.8 million is primarily attributable to the following categories:
• Taxes Other Than Current Secured ($15.2 million) mainly in Property Tax Prior Secured Supplemental due to the increase in supplemental billings compared to prior year, in Property Tax in Lieu of Vehicle License Fees (VLF) due to higher than budgeted growth in assessed valuation, in Teeter Taxes based on a higher collection of receivables from prior fiscal year, and in Sales and Use Taxes mostly due to the continued growth activities in the Unincorporated Area which increases the County’s share of the Pool going forward.
• Taxes Current Property ($7.5 million) primarily in Current Secured Property Taxes due to greater than anticipated assessed value growth and in Current Unsecured Property Taxes due to projected higher revenue based on prior year receipts.
The projected negative revenue variance of $59.3 million is primarily attributed to:
• Intergovernmental Revenues ($50.0 million) tied to aligning federal and State funding to anticipated billable service units and aligning grant funding with overall anticipated expenditures, in COVID-19 Expanding Laboratory Capacity and in COVID Health Disparities grant to align with projected spending, in Immunization Action Plan (IAP grant to align with workplan, in Future of Public Health due to revised allocation estimate, and in California Children’s Services (CCS) tied to prior year revenue adjustments, tied to reduced expenditures in the IHSS MOE and IHSS Public Authority program, tied alignment of spending to grants associated with Community Health Workers Resilient grant and Health Disparities grant and for Afghan Refugee Support grant, in Realignment revenue due to reallocation to Public Health Services, due to Future of Public Health (FOPH) revenue aligning with the State’s revised allocation and lower-than-anticipated COVID-19 Expanding Laboratory Capacity grant funding, in federal revenue primarily to align with projected costs associated with the HOME Tenant Based Rental Assistance (TBRA), and due to less than anticipated reimbursements related to reduced contracts.
• Charges for Current Services ($8.9 million) primarily due to a decline in billable activities for land development, project planning, and building projects due to staff vacancies, tied to a decrease in Intergovernmental Transfer (IGT) revenue primarily due to decrease in census enrollment days for Medi-Cal and due to an anticipated decrease in reimbursements tied to lower than anticipated staff costs in public liability.
• Miscellaneous Revenues ($0.4 million) primarily due to the recoupment of payments in contracted services from prior year adjustments.
Adjustments to the Fiscal Year 2024-25 Amended Budget
Transfers and revisions to the amended budget can be made by formal action of the Board of Supervisors in accordance with the California County Budget Act, Government Code (GC) Section 29125. Increases to the overall budget require 4 votes while transfers of appropriations between departments within the same budgetary fund that do not increase the overall budget or the cancellation of appropriations require a majority vote. However, transfers of appropriations between budgetary funds, referred to as operating transfers, require 4 votes even if the overall budget is not increased.
The recommendations for budget adjustments are explained as follows:
Increases to the Overall Budget and/or Transfers Between Budgetary Funds (Recommendations 2 through 25):
Recommendation 2
On December 11, 1985 (11), the Board of Supervisors adopted an ordinance establishing a Fire Mitigation Fee program with the purpose to provide funding to fire agencies in the unincorporated areas of San Diego County for expansion of fire protection, firefighting facilities and equipment. This request will establish appropriations of $1,000,000 in the San Diego County Fire for the purchase of one Fire Engine to support fire and emergency medical services in East Otay Mesa area, based on Operating Transfers In from San Diego County Fire Protection District, Fire Mitigation Fund.
Recommendation 3
This request will establish $250,000 in the State Asset Forfeiture Fund, Services & Supplies, for expanded training sessions to regional law enforcement officers on best practices of de-escalation tactics with a focus on intervening during mental health crises based on available prior year State Asset Forfeiture fund balance.
Recommendation 4
On June 24, 2020 (12), the Board of Supervisors adopted resolutions authorizing LUEG Department Directors and/or their designee(s) to submit, negotiate, accept and execute all documents necessary to secure grant funding from non-profits, local, state and federal agencies through Fiscal Year 2024-25. On August 25, 2020, the Department of Environmental Health and Quality (DEHQ) received a Notice of Award for an Environmental Public Health and Emergency Response grant from the US Department of Health and Human Services, Centers for Disease Control and Prevention (CDC) Office of Financial Resources. The project awarded will work toward strengthening the County of San Diego's areas in the Temporary Event Food Program, Hazardous Materials Business Plan information, Recreational Water Programs, and Disaster Recovery. This is a multi-year, non-competitive grant and future year funding will be subject to satisfactory programmatic progress and the availability of funds for the project period of September 1, 2020, through August 31, 2025. DEHQ was awarded $39,824 for Year 1, $39,972 for Year 2, $38,363 for Year 3, $46,972 for Year 4 and $39,972 for Year 5 (the last year). This is a request to establish appropriations of $39,972 in DEHQ in Services & Supplies for expenditures related to Strengthening the County of San Diego's Hazardous Materials Business Plan information and Disaster Recovery projects, based on unanticipated revenue from Environmental Public Health and Emergency Response grant funds for the project period of September 1, 2024, through August 31, 2025.
Recommendation 5
On June 24, 2020 (12), the Board of Supervisors adopted resolutions authorizing LUEG Department Directors and/or their designee(s) to submit, negotiate, accept and execute all documents necessary to secure grant funding from non-profits, local, state and federal agencies through Fiscal Year 2024-25. On February 7, 2024, the Department of Parks and Recreation (DPR) received a Notice of Award from the San Diego River Conservancy for improvements at Lindo Lake County Park. This recommendation will establish appropriations of $2,000,000 for Capital Project 1025566 Lindo Lake Improvements Phase II based on a grant awarded to the Department of Parks and Recreation by the San Diego River Conservancy to provide funding to assist in restoration of native habitat, install hardscape, and provide recreational and trail amenities to the West Basin at Lindo Lake County Park. The estimated total cost of the Capital project is $21,500,000 and the anticipated completion date is Summer 2026.
Recommendation 6
This recommendation will establish appropriations of $679,000 in the Capital Outlay Fund for Dos Picos Park Playground Equipment ($91,000), Dos Picos Park Small Playground Equipment Replacement ($68,500), Steele Canyon County Park Playground Equipment Replacement ($97,500), Parks Playground Equipment ($379,000), and Lindo Lake County Park Playground Equipment Replacement ($43,000) based on an Operating Transfer In from the General Fund, to fund the construction of playground equipment replacements at the various parks. The funding source is Department of Parks and Recreation prior year General Fund fund balance amounts that were not used. The estimated total cost of the Capital projects is $1,500,000 and the anticipated completion date is Summer 2025.
Recommendation 7
This recommendation will establish appropriations of $30,000 in the Capital Outlay Fund for Stelzer Park Ranger Station and Visitor Center based on available Stelzer Trust Fund fund balance to provide funding for additional cobblestone finish and to raise the existing fire water pressure to meet occupancy requirements. The estimated total cost of the Capital project is $1,700,000 and the anticipated completion date is January 2025.
Recommendation 8
This recommendation will establish appropriations of $20,000 in the Department of Parks and Recreation, Services & Supplies, based on available Stelzer Trust Fund fund balance to provide funding for the installation of alarms for the new office at Stelzer Park.
Recommendation 9
This recommendation will establish appropriations of $888,000 in the Department of Parks and Recreation based on available Waterfront Trust Fund fund balance to provide funding for improvements to the information booth, sod replacement, wedding arbor, and installation of security cameras at Waterfront Park.
Recommendation 10
This recommendation will establish appropriations of $150,000 in PLDO Area 40 Palomar/Julian, Operating Transfer Out based on available PLDO Area 40 Palomar/Julian fund balance. The funds will be provided to the Julian Heritage Foundation through an existing grant to provide support for the construction of Julian Town Square.
Recommendation 11
This recommendation will establish appropriations of $1,700,000 in the Inactive Waste Management Fund for the landfill gas system at Palomar Airport Landfill Unit 3 to improve gas collection and monitoring and for landfill gas system infrastructure asset condition assessment at all County maintained landfills to prioritize future maintenance and repairs. The funding source is prior year General Fund fund balance in the Department of Public Works.
Recommendation 12
On June 14, 2023 (5), the Board of Supervisors adopted the resolutions approving the list of road resurfacing projects proposed to be funded by Senate Bill 1 for FY 2023-24. This recommendation will establish appropriations of $24,050,000 in the Department of Public Works Road Fund to support the FY 2023-24 (Year 7) road resurfacing projects, based on available prior year Road Fund fund balance. Capital projects bid pricing for these projects are anticipated to be higher than currently budgeted based on prior year construction awards. Construction costs have increased over the last two years by over 30% annually. If approved, this request will establish the appropriations to ensure funding is available when the Year 7 projects are advertised and awarded. Total estimated project costs are $85,644,872 and the projects are anticipated to be completed by Winter 2026.
Recommendation 13
This recommendation will establish appropriations of $1,300,000 in the Department of Public Works General Fund, Services & Supplies, for broadband access in schools and the staff support for broadband projects. The funding will support projects that provide high-speed internet access to the unincorporated area. The funding source is unused revenue for previously designated broadband projects within the Department of Public Works, General Fund.
Recommendation 14
This recommendation will establish appropriations of $2,030,000 in the Department to Public Works Road Fund to fund the construction for the Rainbow Water Quality Improvement Project. Capital project bid pricing is anticipated to be higher than currently budgeted. If approved, this request will establish the appropriations to ensure funding is available when the construction is anticipated to be awarded. The total estimated project is $2,030,000 and is anticipated to be completed by March 2025. The funding source is available prior year General Fund fund balance.
Recommendation 15
This recommendation will establish appropriations of $297,273 in the Department of Public Works Road Fund for road station facility improvement projects that will improve lighting and fencing at various road stations. DGS recently provided the facility assessment report of DPW road stations; this funding will allow the department to initiate unanticipated facility improvements that will improve the security of the facilities. The funding source is available prior year Road Fund fund balance.
Recommendation 16
This recommendation will establish appropriations of $848,804 based on over-realized General Purpose Revenue in Property Tax Prior Secured Supplemental due to the increase in supplemental billings to provide funding for one-time needs in the Board of Supervisors’ offices for various Services & Supplies costs.
Recommendation 17
This recommendation will transfer appropriations of $1,080,000 from the Capital Outlay Fund and related Operating Transfers In, to the Library Fund to provide funding for Capital Project 1020105, Casa de Oro Library, based on transfer from Capital Project 1026157, Casa de Oro Park Amenities to align budget with anticipated actuals. The total project cost is estimated at $22,830,000 and the project is anticipated to be completed in Winter 2025.
Recommendation 18
On June 25, 2019 (17), the Board established appropriations of $150,000 for site search and evaluation for a new fire station in Jacumba. An additional $250,000 was appropriated June 28, 2022 (24) for land acquisition and design. Further appropriation of $17,000,000 was included in the FY 2023-24 Operational Plan for the construction of a 7,900 square foot fire station. The total project budget is now $17,400,000. The project is currently in the design and procurement process.
During review of the conceptual plan and subsequent to the Board’s adoption of the FY 2024-25 Operational Plan, San Diego County Fire requested an increase in the building square footage of the new Jacumba Fire Station by approximately 500 square feet to meet operational needs. This recommendation will establish appropriations of $700,000 based on an Operating Transfer In from San Diego County Fire Protection District. If approved, today’s request will result in an increase to the total project budget to $18,100,000 which is funded by General Fund ($17,000,000), Fire Mitigation Fees ($700,000), Other Services to Government Agencies ($250,000) and existing General Fund fund balance ($150,000). Construction of the new Jacumba Fire Station #43 is anticipated to begin October 2025 and complete February 2027.
Recommendation 19
The County’s enterprisewide budgeting software application, Performance Budgeting, will require an upgrade beginning in FY 2024-25. Appropriations for this upgrade are currently budgeted in Finance Other - Countywide General Expense, and will be transferred to the software application’s system administrator, the Finance and General Government Group Executive Office, for project management and tracking purposes.
Recommendation 20
The Integrated Property Tax System (IPTS) project, which will replace a number of legacy applications currently used for the administration of property tax functions, is scheduled to complete in August 2025. The requested amount of $1,337,282 represents the remaining balance of funding that was appropriated in FY 2023-24 for the purpose of integrating existing mainframe functionality with IPTS. Unused amounts from FY 2023-24 were categorized as assigned General Fund fund balance for the IPTS project pending the completion of system integration requirements.
Recommendation 21
On April 30, 2024 (12), the Board of Supervisors directed staff to investigate and report back to the Board with opportunities to expand the County’s reach to local businesses through outreach, education, and a review of current programs that enhance the ability of local businesses to participate in County procurements. On August 27, 2024 (22), the Board also directed staff to operationalize and fund an insurance and bonding assistance program for local small businesses. Today’s recommendation provides staffing support in the Economic Development and Government Affairs division of the Finance and General Government Group for small business outreach, procurement, technical assistance, and bonding activities ($108,000) and a bonding and insurance pilot program ($200,000) based on Purchasing Internal Service Fund revenues and fund balance
Recommendation 22
Board approval is requested to transfer existing funds of $15,000 from the Neighborhood Reinvestment Program budget and increase appropriations in the County Library for the purchase of backpacks, books, and school supplies, in accordance with Board Policy B-72, Neighborhood Reinvestment Program.
Recommendation 23
This recommendation establishes appropriations of $32,363 in the Community Enhancement Program budget (Org 12900) based on unused portions of prior year allocations that were returned in the current fiscal year. This will allow the recently returned funds to be allocated to other projects.
Recommendation 24
This recommendation will establish appropriations totaling $46,365 in the Neighborhood Reinvestment Program budget ($29,232 in Org 15650; $15,380 in Org 15655; $1,433 in Org 15660; and $320 in Org 15665) based on unused portions of prior year allocations that were returned in the current fiscal year. This will allow the recently returned funds to be allocated to other projects.
Recommendation 25
Board Policy B-37, Use of Capital Program Funds, notes that on occasion, due to the nature of major maintenance projects, these projects may be reclassified as an operating or capital expense based on financial reporting requirements. Pursuant to Board Policy B-37, to ensure accuracy in financial reporting, the Chief Financial Officer shall make required adjustments to departmental operating budgets and within the Major Maintenance Capital Outlay Fund (MMCOF) or the Major Maintenance Internal Service Fund (MMISF). Due to the emergent nature of some major maintenance projects, some of these adjustments may require ratification by the Board. These recommendations will allow for the accurate financial reporting of major maintenance projects, which are listed in Appendix C along with the related required adjustments.
This recommendation will result in a net increase of appropriations in the MMCOF of $29,521,915, which includes a transfer of savings from a nearly completed Parks project (in the same area) from the Capital Outlay Fund and reclassification of major maintenance projects which are supported by existing department budgets.
Transfers Within Budgetary Funds and/or Cancellation of Appropriations (Recommendations 26 through 32):
Recommendation 26
This recommendation will transfer Salaries & Benefits appropriations of $230,325 from the Health and Human Services Agency to the Chief Administrative Office (CAO) to support the strategic restructuring of key staff to address enterprise operations, funded by General Purpose Revenue. This realignment of resources directly supports actions taken earlier this fiscal year to enhance CAO staff capabilities in the areas of policy formation and human resources.
Recommendation 27
This recommendation will allow for the implementation of strategies to minimize any risk associated with the December 31, 2024 American Rescue Plan Act (ARPA) obligation deadline and would not impact the Board’s prior approval of program spending under the ARPA Framework. According to the U.S. Treasury Department, all ARPA funds need to be obligated by December 31, 2024 and expended by December 31, 2026. This recommendation will shift ARPA funds to other eligible costs as needed and redirect existing allocated General Purpose Revenue (GPR) and/or Realignment revenue for approved projects in the ARPA Framework that are not able to be obligated by the end of December due to unforeseen procurement or other delays.
Recommendation 27a would approve the use of a lost revenue strategy. According to the U.S. Treasury Department, lost revenue funds can be used to fund government services [and] generally include any service traditionally provided by a government; the Treasury Department goes on to explain that payroll for government employees, contracts, grants, supplies and equipment, rent, and the many other costs that governments typically bear to provide services are costs that could comprise the costs of government services, and are eligible uses of funds. Lost revenue capacity is capped at an amount determined by a defined formula set by the Treasury Department. It is estimated that the County has just under $13,000,000 remaining in available lost revenue capacity to access. Today’s actions will approve utilization of lost revenue capacity of up to $13,000,000 for General Relief costs in the Health and Human Services Agency (HHSA) that are traditionally funded with General Purpose Revenue. The General Purpose Revenue that is replaced with ARPA lost revenue will be repurposed for areas in the ARPA Framework as needed that may have a risk of not being obligated by the federal deadline, such as those associated with the Homeless Services component of the ARPA Framework, including Compassionate Emergency Solutions and Pathways to Housing efforts.
Since the ARPA revenue loss capacity is capped, Recommendation 27b is another strategy that would be used as needed to help mitigate risks associated with obligation and expenditure deadlines by replacing previously allocated GPR and/or Realignment revenue with ARPA Revenue for items that are ARPA eligible under the U.S. Treasury Department criteria, including addressing behavioral health needs which is an enumerated eligible use of ARPA funds under the Treasury’s Final Rule. The available GPR and/or Realignment revenue of up to $50,000,000 will be used to fund Board approved ARPA Framework components that may be at risk of not being obligated by the federal deadline.
Recommendation 28
This recommendation will transfer appropriations of $1,000,000 within the Capital Outlay Fund and related Operating Transfer In from the General Fund of the Department of Parks and Recreation to provide funding for Mira Mesa Epicentre to support the construction costs, based on a transfer from Sage Hill Staging Area. The funding source is available prior year General Fund fund balance. The estimated total cost of the Capital project is $12,000,000. This project is anticipated to be complete in December 2025.
Recommendation 29
This recommendation will transfer appropriations of $188.92 within the Capital Outlay Fund and related Operating Transfer In from the General Fund to provide funding for Jess Martin Park Water Conservation to close out the Capital project, based on transfer from the General Fund (MMISF 1027157 Jess Martin Park Walkway Improvement).
Recommendation 30
This recommendation will cancel appropriations of $37,489.97 and related Operating Transfer In from the General Fund in the Multiple Species Conservation Program Acquisition Fund and transfer these appropriations to the Department of Parks and Recreation to properly incur non-capital expenditures for pre-acquisition due diligence activities related to property that was not acquired in Capital Projects1025479 De Luz Navy Partnership Acq, 1026289 Mt Olympus Withsosky Acq, 1026767 Rancho Alegria Acq, and 1027045 Ramona Fire Station Acq. These expenditures did not meet the criteria for capitalization pursuant to County of San Diego Administrative Manual policy 0050-02-01, Control of Capital Assets and Minor Equipment.
Recommendation 31
The Insurance Internal Service Fund (ISF) became effective in FY 2024-25 for the purpose of tracking financial transactions related to the provision of insurance coverage for County departments. This fund allocates the costs of insurance premiums across departments based on each department’s ownership of assets named in the various insurance policies. Given the potential size of the fund’s balance in future years, interest earnings could be significant enough to defray some of the allocated costs. Approval of this recommendation would allow any interest earned by the Insurance ISF to be retained in the fund to offset future insurance costs.
Recommendation 32
This recommendation will allow the Department of Parks and Recreation, upon successful negotiation of a memorandum of understanding, to provide $59,000 to the City of San Diego to support operational costs necessary for the Lake Hodges, Lake Sutherland, and El Capital reservoirs to remain open to the public in Fiscal Year 2024-25, providing continued recreational opportunities to the community. This recommendation will provide for the implementation of programming that was included in the Fiscal Year 2024-25 adopted budget.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed actions support the Strategic Initiatives of Sustainability, Equity, Empower, Community and Justice in the County of San Diego’s 2024-2029 Strategic Plan by fully committing to use County resources to meet the highest priority needs of residents.
Respectfully submitted,
ebony n. shelton
Chief Administrative Officer
ATTACHMENT(S)
Schedule A
Schedule B
Notes to Schedules A and B
Appendix C