1 Long-Range Financial & Service Forecast FY 2011-12 thru FY 2015-16.
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Transcript of 1 Long-Range Financial & Service Forecast FY 2011-12 thru FY 2015-16.
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Long-Range Financial & Service ForecastFY 2011-12 thru FY 2015-16
Overview
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• Financial Forecast• FY 2010-11 Estimates• FY 2012 -16 Forecast
• Outstanding Strategic Issues• Employee Compensation• Employee Healthcare• Unfunded Federal and State Mandates• Increased demand for services
• Recommendations
Background
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• In the Fall of 2008, first impacts of the Global Financial Crisis began to be felt in Bexar County
• Commissioners Court adopted Expenditure Balancing Strategy:
– FY 2008-09: Directed mid-year 3-5 % expenditure reductions
– FY 2009-10: Additional budget reductions of 3-5%
– FY 2010-11: Maintain FY 2009-10 department budget levels
Background
• Targeted Hiring Freeze
• No salary increases (other than CBA)
• No across the board salary cuts, furloughs, etc.
• In December 2010, one-time, non-recurring $500 salary adjustment awarded to employees
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General Fund Background
• Before corrective actions were taken the General Fund Operating Budget was $341,076,864
• FY 2010-11 General Fund Operating Budget is $327,961,935
• General Fund Savings is $13,114,929 from cost savings strategies, this represents a 4% reduction in operating expenses from FY 2008-09
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One-time Revenues
Even with these measures, one time money used for last two years:
•In FY 2009-10: $6 million in one-time revenue was used to fund recurring expenditures
•In FY 2010-11 Budget identified an additional $2 million in recurring revenues to offset the previous year one-time revenues
•Therefore, $4 million of the revenue is still one-time, causing the County to draw down on Fund Balance to provide a balanced Budget.
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Funds Needed
Funds Available
Fall 2010 Forecast • Adopted Budget projections assumed 1.5% increase
in Ad Valorem revenue for FY 2011-12
• Also assumed a 3% increase in subsequent years
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Current Budget Estimates
RevenuesFY 2010-11 Budgeted Revenues: $323,561,404
PRM Projected Revenue for FY 2010-11: $319,626,152
Less than Budgeted: ($3,935,252)
ExpendituresFY 2010-11 Adopted Budget: $327,961,935
Current Estimate FY 2010-11: $322,701,688
Savings: $5,260,247
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Revised Forecast Assumptions
Based on preliminary tax rolls, ad valorem revenues for FY 2011-12 are less than the FallProjection
Result: this forecast lowers projected property taxrevenue growth from previous forecasts:
Current Previous
• (1.6%) in FY 2011-12 1.5%
• 1% in FY 2012-13 3%
• 2% in FY 2013-14 3%
• 3% through FY 2016. 3%
Long Range Forecast
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Funds Needed
Funds Available
Budget Needs
• Based on the current forecast adjusted for the loss in ad valorem, the County needs to:
– Identify an additional $2 million to maintain a balanced baseline budget over the forecast period
– Will NOT address Strategic Issues (following slide)
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Baseline LRFF w $2M Before Addressing Strategic Issues
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Strategic IssuesCost not included in forecast
• Employee compensation programs (including New Collective Bargaining Contract)
• Healthcare Costs
• Unfunded Federal & State Mandates/Budget cuts
• Increasing demand for County Services due to Population Growth
All are not included in the previous projections
Employee CompensationEmployee Compensation
• Over the last ten years, the County has provided competitive wages for our employees through various compensation programs
– Regularly scheduled Pay table studies
– 6 month pay increase
– Hiring and promoting above minimum
– Progressive pay model
– Merit Award programs
– Cost of living increases
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Employee CompensationEmployee Compensation
• This program has largely succeeded in keeping Bexar County competitive with the market
• However, given the revised lower forecast growth rates in real estate, employee compensation will not be able to grow as fast as in the past
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Employee CompensationEmployee Compensation
• 74% of County Operating Revenue is provided by property taxes
• Employee salaries and benefits account for 71% of County Operating Expenses
• 1% salary increase for all County employees =$1,834,713, about equal to one percent growth in property tax revenue
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Employee CompensationEmployee Compensation
• As part of Commissioners Court Expenditure Balancing Strategy there were no across the board salary increases during the past three years.
• Going forward, the County will need to identify ways to fund Cost of Living Adjustments to keep up with future inflation growth and maintain market competiveness with other employers
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Collective BargainingCollective Bargaining
• County entered into collective bargaining agreement with Deputy Sheriffs Association of Bexar County in Aug 2006
• Contract expired in Sep 2009 – currently in “evergreen” status
• Negotiations for new contract started Apr 2009 - no final agreement yet
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Collective BargainingCollective Bargaining
• $531,729 budgeted in FY 2010-11 for Deputy Sheriff “step” increases required by the collective bargaining agreement
• Bargaining unit members pay FY 2006-07 health insurance premium rates, per the collective bargaining agreement
– For FY 2010-11, this benefit is estimated at $882,795
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Medical Plan FundingMedical Plan Funding
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County Contribution $22,570,609
Employee/Retiree Contribution $9,730,491
Total Contributions $32,301,100
Total Contributions $32,301,100
Total Expenditures $37,668,274
Medical Plan Shortfall * $5,367,174
* This is the amount in additional funding (or savings from plan design) that is needed to ensure sustainability of the Medical Plan
Contributions/ExpendituresContributions/Expenditures
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non-CBA Employees
CBA Employees Retirees
2010-11 Contributions
$5,675,657 $2,374,720 $1,710,510
2010-11 Expenditures
$20,378,100 $9,255,265 $8,034,909
Difference (County Contribution)
$14,702,443 $6,880,545 $6,324,399
% Employees 28% 26% 21%
% County 72% 74% 79%
Medical Inflation TrendsMedical Inflation Trends
• Medical inflation trends are expected to be 10% per year over the forecast period
– Segal Company: 10.6%source: 2011 Segal Health Plan Cost Trend Survey
– Mercer: 10% source: Wall Street Journal, “What’s Happening to Your Health Plan?”, 10/9/2010
– Bureau of National Affairs: 8.4% - 12.7%source: “Surveys Predict Health Care Costs Will Rise 8.2 to 12.7% in 2011,” Managing Benefits Plans, Issue 13-2, February 2011
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Medical Claims Cost PyramidMedical Claims Cost Pyramid
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% Claimants % Costs
7.9% 60.4%
9.3% 16.6%
12.1% 10.7%
19.2% 8.0%
51.4% 4.4%
Claims Group (total 2010 claims)
Five Year Forecast
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Medical Plan OptionsMedical Plan Options
• County and employees pay more for same coverage
• Reduce benefits to match current contributions
• Decrease costs through healthy lifestyle, preventive care, plan incentives
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Unfunded Mandates
• Expect decline in State and Federal funding • Unfunded mandates are a growing concern
• State is considering cutting mental health beds, which will impact jail population
• Other issues such as voter identification, immigration, and appraisal caps are anticipated
• Medical Reform
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Long Range Service Forecast
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Long Range Service Forecast
Planning tool for use in preparing for increased service demand as a result of:
Increases in overall Bexar County population
Increased population in unincorporated area
A more urban-like and developed unincorporated area
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Population Drives Demand for Services
Some services are driven by the unincorporated area population
County Roads, Fire Marshal, etc.
Others are driven by demographic factors, such as age
Citizens 18 and over drive the demand for Elections, Adult Criminal Justice, etc.
Population 17 and under drives the demand for
Juvenile Services
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Forecast Methodology
Analyzed recent trends in the population of Bexar County based on US Census data
Utilized historical information and what is known already about the future to project future population
Results provide the drivers for County services
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Population Trends
Overall Population
Bexar County’s population increased by 23.1 percent from 2000 through 2010
Increase of around 320,000 citizens
Annual increase of 2.1 percent, higher than the annual increase over the past four decades
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Population Trends
Unincorporated Area Population – “Balance of Bexar”
Unincorporated area population increased by 79 percent from 2000 through 2010
Increase of around 110,000 citizens
Annual increase of 6 percent
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Population Trends
Population in the unincorporated area now makes up a greater percentage of the total population
Census Year Incorporated Area Unincorporated Area
2000 1,253,568 90.0% 139,363 10.0%
2010 1,465,022 85.4% 249,751 14.6%
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Population Trends
34.3 percent of the increase in the total population occurred in the unincorporated area
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Population Trends
82 percent increase in the number of housing units in the unincorporated area from 2000 to 2010
46,770 in 2000
85,452 in 2010
Population Trends
Bexar County’s population has gotten older
Census Year 17 and under 18 and over Total
2000 396,473 28.5% 996,458 71.5% 1,392,931
2010 465,286 27.1% 1,249,487 72.9% 1,714,773
Most County services are delivered to those 18and older 36
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Overall Population Projection
Used annual growth rate in the 2000s to project the growth through 2017 using 2010 population as the baseline
DecadeAnnual PercentagePopulation Increase
1960-1969 2.09 %1970-1979 1.91 %1980-1989 1.99 %1990-1999 1.75 %2000-2009 2.10 %2010-2019 2.10%
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Overall Population Projection
Bexar County’s population projected to increase by 13.3 percent through 2017
Increase of 268,000 citizens
Estimated Bexar County population in 2017 of 1.9 million citizens
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Unincorporated Area Projection
Used “Balance of Bexar” figures from US Census 2010 as baseline
Projected growth rate of about 4.9 percent
Census Year Incorporated Area Unincorporated Area
2000 1,253,568 90.0% 139,363 10.0%
2010 1,465,022 85.4% 249,751 14.6%
2017 1,631,126 82.2% 352,167 17.8%
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Unincorporated Area Projection
Bexar County’s unincorporated area population projected to increase by 33.9 percent through 2017
Increase of 102,000 citizens
Estimated unincorporated area population in 2017 of 352,000 citizens
Estimate 5,000 plats each year
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Age Group Projections
Utilized 2010 Census numbers as baseline
Applied percentages by age group utilized in projections prepared by the State Demographer
Bexar County population will continue to get older
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Age Group Projections
Bexar County’s population will continue to get older
Census Year
17 and under 18 and over Total
2010 465,286 27.1% 1,249,487 72.9% 1,714,773
2017 520,003 26.2% 1,463,290 73.8% 1,983,293
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Service Forecast
Population growth impacts the level of demand for Bexar County services
Given limited resources, the County needs to plan so that it can effectively deal with the challenge of providing more and potentially different services
First step is to forecast what the demand will be – Service Forecast
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Service Forecast Methodology
Identified service driver (population segment) for each core mission
Utilized projected population segment to forecast workload demand for each core mission
Allocated staff to core missions
Separated out administrative and support staff
Projected costs/staffing based on future workload demand
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Service Forecast Cost
Six Service Areas and unadjusted 5-year impact:
Adult Criminal Justice Services $11.1M Juvenile Criminal Justice Services $2.2M External Government Services $2.1M Roads and Capital Program $3.2M Social Services $252K** Internal Government Services $502K
**Does not factor in losses of Federal or State Funding
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Service Forecast Results
Summary If cost-effective service delivery methods aren’t identified, the cost of serving our growing County population could be $19.2 million over the next five years.
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Service Forecast Results
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Service Forecast Results
County will need change our way of delivering services:
E-gov, technology, automation
More efficient business processes
More cost-effective staffing models
Proactive service delivery planning program
Focus on Core Service Delivery
The “New Normal”
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LRFF Recommendations
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FY 2010-11
• Commissioners Court direct PRM to identify:
• Additional $1 million in recurring mid-year savings/revenue enhancements ($2 million
when annualized) for Commissioners Court consideration to address base budget imbalance
• Target recommendations to Commissioners Court in May 2011
FY 2011-12 Budget
Commissioners Court direct PRM to:
– Develop FY 2011-12 Proposed Budget to recommend an additional $5-10 million in savings or revenue enhancements
– 1.5 - 3% of GF $327 million Operating Budget
This will require hard choices
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FY 2011-12 Budget
Direct staff to:
• PRM: Identify Changes to employee Medical plan for next Plan Year (January 2012)
– Plan design changes (covered benefits, co-pays, deductibles, out-of-pocket maximums)
– Healthy lifestyle / healthy outcome incentives
• Target is to reduce annual County cost growth to 3% ($2 million cost avoidance/savings per year)
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5 Year Plan for Service Delivery
• PRM: Work with each office and department to develop 5-year Service Delivery Plans. Presentation date to Court in Summer 2012
• BCIT/PRM: Work with Offices and departments to identify and prioritize I.T. projects that generate highest return on investment.
Goal should be $5 million identified in annual R.O.I. savings by FY 2012-13.
Direct staff to:
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5 Year Plan for Service Delivery
• All Offices and Departments: Identify improvements in current business practices
Goal of this 5 year plan is to allow the County to deliver services to our growing population while still being able to compensate our employees as cost of living and inflation increases
Direct staff to:
Adjusted Forecast
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