The URL can be used to link to this page

Home My WebLink About2023-10-19-minutes-finance-study-sessionCreated on 10/19/2023 11:47:08 AM KITTITAS COUNTY COMMISSIONERS Finance Study Session Regular Meeting Thursday October 19, 2023 - 1:30 PM BOCC Conference Room 205 West 5th Room 108 - Ellensburg 1. Call to Order 2. Citizen Comments (1 min. time limit) 3. 2024 Budget: Summary Figures and Next-Steps 4. 2024 Budget: Capital and Maintenance Projects 5. 2024 Budget: Staffing Tactics for Retirements and Turnover 6. 2024 Budget: Health Self-Insurance Program 7. 2024 Budget: Revisions to General Fund Preliminary Expen ses 8. Other Business - No Action to be taken 9. Concluded Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Summary Figures and Next Steps Meeting Finance Study Session October 19th, 2023 Summary: • Preliminary General Fund deficit: $7.7MM Background & Analysis: • Prelim budget will be revised ongoing, up to and beyond adoption-date of December 5 • Finance staff is progressing on high-priority topics shown below, to be reflected in follow-up discussions with management and BOCC, and captured in budget revisions and amendments ongoing: Conclusion / Next Steps: • Not an action item; BOCC receive and file, provide feedback and/or direction for follow-up meetings • Next meeting: Thursday, October 26, 10am Topic Status Notes Technology Reserve Complete next phase; cell phones (2024) analysis ongoing; updates via IT Study Sessions Revenue Budgets and Forecasts Complete Treasurer 2024 budgets are reflected in prelim budget Year-end forecasts to be updated at next BOCC budget meeting, 10/26 Projects Underway Finance to provide funding updates and impacts 10/26, including ARPA status Next full discussion 10/31 Personnel Underway Vacancy tactics today, 10/19 Treasurer and Pub Defense requests next week Health Insurance Underway Discussion of reserve funding today, 10/19 Staff to provide follow-up savings impact on 10/26 Fund Balances and Reserves Underway utilization of Jails reserve follow-up meeting with 3/10ths stakeholders increased utiliziation of CIP, other funds Expense Analysis Underway aka "Bake Sale"; Prelim reduction $3MM Finance reviewing with management; will provide ongoing updates to BOCC Union Contracts Pending Collaboration with HR to review and quantify cost-driver data and related contract terms for BOCC consideration review of renewal dates and consideration of contract alignment Public Works Pending Figures are prelim/placeholder only; PubWorks to provide on 11/1 Impacts are primarily limited to respective funds (Roads, CDS, Airport, etc.) Budget Documents Pending Prelim public-facing docs to Mgt Team in Nov drafts to BOCC ongoing during budget meetings Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Capital and Maintenance Projects Meeting Finance Study Session October 19th, 2023 Summary: • Staff met on Tues to discuss preliminary maintenance and capital projects. • Follow-up meeting with BOCC on October 31 will have attendance from all project stakeholders. Goal is to set appropriations at that meeting. Background: • Structure of this topic is to set priorities and appropriations in this order o Projects underway but not finished, needing continued appropriations in 2024 o Projects previously approved and budgeted, but not yet started o New project requests • Follow-up discussion on Oct 31 will identify funding sources outside of General Fund, so as to minimize impact to budget deficit. Analysis: COUNTY JAIL • Sheriff’s Office has provided prelim approval and recommendation to fund all Jails projects from the “Jails” reserve within the General fund. This reserve is expected to be over $10MM by 2023 year-end. • Finance will review whether any jails projects were ARPA-funded, so as to repurpose those ARPA appropriations. SOLID WASTE • Primary project (LC Transfer Station) is funded to $10MM via loan. Ability to fund balance via same loan is pending, and will be the subject of follow-up study session discussions. Other projects are pending review of Solid Waste fund balance and fee structure. Request Facility Project _2024 Approved Jail Elevator 120,000 Jail enclosure 50,000 Jail entry doors 81,212 Jail Exterior 450,000 Jail exterior repairs 400,000 Jail outdoor rec re-seal 150,000 Jail vinyl flooring 60,000 Approved Total 1,311,212 New request Jail Jail fire line repairs 750,000 New request Total 750,000 Grand Total 2,061,212 Request Facility Project _2024 Inprogress Transfer Station LC New Transfer Station 17,000,000 Approved Transfer Station UC Entrance and updates 1,500,000 New request Landfill Closure of LPL Landfill 300,000 Grand Total 18,800,000 Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Capital and Maintenance Projects Meeting Finance Study Session October 19th, 2023 EVENT CENTER • Management is discussing whether/how to apply for additional and/or larger Stadium / Lodging Tax grant funds so as to minimize General Fund impact. MISC COURTOUSE • Funding sources TBD. Items not on the CIP would be funded from General Fund. OTHER SHERIFF REQUESTS (not Jails) • Funding sources TBD Conclusion / Next Steps: • Not an action item; review and forward questions to Finance prior to October 31 follow up. • Staff will further develop ranking and funding sources for October 31st meeting, along with compete ARPA status (remaining funds). Request Project _2024 Approved Armory AV 40,000 Granstand Rooms fire system 10,000 Armory Walls New request RV Park Utility Installation 200,000 South Grandstands Exterior Painting 75,000 Barn/Vendor Electrical Upgrades 65,000 Replace Expo Hall Exterior Doors 50,000 RV Park Design Planning 50,000 Repeat request Barn Sound System Upgrade/Repair 12,000 Grand Total 502,000 Request Dept Project _2024 Inprogress Building Maintenance North Jail Parking lot 880,000 Approved Building Maintenance Parking Lot 30,000 Sheriff Parking Seal New request Building Maintenance Sidewalk Replacement 230,000 Window glazing 100,000 Replace Interior Vestibule door 25,000 Crack Seal Permit Center 15,000 Replace ADA Motor 10,000 Information Tech New Door 10,000 Lower District Extend Jury Box 70,000 Superior Court Blinds for Jury Room & Courtroom 215 5,000 Grand Total 1,375,000 Request Project _2024 Approved County-wide security cameras 250,000 sherif Records room New request Evidence bay build-out 70,000 Grand Total 320,000 Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Staffing Tactics for Retirements and Turnover Meeting Finance Study Session October 19th, 2023 Summary: • Management recognizes that turnover of key staff is, directly and indirectly, a significant cost driver. • This agenda topic brings two aspects of this issue to BOCC for consideration and inclusion in the 2024 budget. Background & Analysis: Succession and Transition Planning – Upper District Court • Request is to authorize partial-year staffing above the approved FTE roster, and to appropriate an additional $50K toward this initiative. • Three long-term employees will retire in mid-2024 • UDC request is to allow for six months of “overlap” staffing during 2024 to facilitate a more effective transition, whereby existing staff will move to vacated positions, and new hires will fill vacancies left by promoted staff • Budgeting convention is to reflect full-year salary & benefits for all approved FTE positions, therefore there are six months of savings in these highest-paid administrative positions to partially offset costs • If approved, staff will begin recruitment in 2023 to allow for new staff to begin by February, 2024 On-boarding Timelines and Chronic Vacancies – Sheriff, Corrections and Law Enforcement • Request is to authorize Sheriff’s Office to hire above its respective Law Enforcement and Corrections FTE rosters, up to two and three positions, respectively. o Owing to the frequency of turnover, and the convention of full-employment budgeting, Finance allows that this proposal may not drive costs over budget, as Sheriff Office roster will likely vacillate between over- and under-staffing throughout the year. o Sheriff, HR and Finance will report back mid-year with year-end estimates and related resourcing requests, if applicable. • Management observes that under-staffing in these area entails a high potential liability, as witnessed in jury awards and related corrective and/or evasive action by insurers. This is primarily a risk-mitigation proposal. • Corrections Division has historically been chronically under-staffed. The disruption is compounded by a required ten-week academy enrollment. • Law Enforcement programming is designed around a “fully deployed” roster. While law enforcement vacancies are typically fewer and lower-proportion than Corrections, its full deployment is undermined by a longer (nineteen weeks) academy enrollment. • These proposals are part of a multi-faceted approach to establishing a long-term improvement to each division’s “tenure profile”. Related proposals are under discussion and will be presented for BOCC consideration once they are fully designed. Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Staffing Tactics for Retirements and Turnover Meeting Finance Study Session October 19th, 2023 Conclusion / Next Steps: • Provide consensus direction to staff regarding whether to proceed with these recommendations, and to reflect same in the 2024 budget. • If authorized, HR will work to ensure compliance with legal, union contract, and civil service requirements. • Sheriff, Finance, and HR will develop related metrics to enable regular ongoing analysis and reporting to BOCC. Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Health Self-Insurance Program Meeting Finance Study Session October 19th, 2023 Summary: • County’s health self-insurance program, to begin on January 1, 2024, has a State requirement for minimum cash reserves • Finance Director proposes repurposing “Rainy Day Fund” of $1.5MM to satisfy this requirement. Background: • State of WA allows two years to accumulate minimum reserve requirements equal to sixteen weeks of claims costs; current estimate: $1.3MM • County has $1.6MM within General Fund reserves assigned as a “Rainy Day Fund”, which was established in 2004 during the annual budget retreat. • Finance Director finds no formal documents to memorialize the “rainy day fund”, other than as a budget/finance policy embedded in each annual budget document. Therefore no policy, resolution, or code revisions are included with this recommendation Analysis: • Health insurance benefits are the fastest-growing cost of the largest expense category (FTE personnel). The self-insurance program is a proactive initiative to pursue sustainable costs without reducing coverage. • Self-insurance premium for 2024 plan renewal includes an extra margin to meet this requirement on a two-year timeline. Using “Rainy Day Fund” allows County to o Eliminate this margin, generating a 2024 budget savings of 2024 Budget Savings of $250K General Fund, $400K Countywide. o Exceed the estimated State-required margin by $250K, 20% on the first day of plan impmentation o Maintain General Fund balances at five months’ expense; more than twice the GFOA- recommended level of two months’ expense. Unassigned, $18 Jails, $9 CrimJust, $2.5 Rainy Day, $1.6 General Fund Balances 2022 YE: $31MM 10% 15% 20% 25% 30% Health Benefits as % of Salaries: General Fund Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Health Self-Insurance Program Meeting Finance Study Session October 19th, 2023 Conclusion / Next Steps: • BOCC provide feedback to this initial proposal of repurposing the “Rainy Day Fund” to satisfy health self- insurance reserve requirements, and eliminating the corresponding health plan premium expense. • If BOCC is not opposed, Finance Director will discuss during next management team meeting • Barring any other opposition or considerations, 2024 adopted budget will reflect the above changes. Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Revisions to Gen Fund Expenses Meeting Finance Study Session October 19th, 2023 Summary: • BOCC has informally agreed to the 2024 budget “as presented”, with the understanding that management will continue to explore revisions via topics prioritized by Finance Director • Current 2024 General Fund budget has an approximate deficit of $8MM • Finance staff is presenting expense revisions via budgeting to historic mean-actual, (aka “Bake Sale”) yielding a possible/preliminary reduction of $3MM Background & Analysis: • It is common for departments and offices to independently develop expense budgets to reflect historic- high, so as to ensure a margin of error for costs, and to avoid “asking for more money” mid-year • As a countywide convention, this is inherently inefficient, as most expense categories will hover around historic mean (“average”) • This inefficiency is eventually quantified after year-end via “carry-forward” calculations. County’s budgets have been historically inaccurate, as shown below: • By allowing for regular revisions to adopted budgets, managers can forego across-the-board over- budgeting • Finance identifies over $3MM of possible / likely over-budgeting which might be safely reduced to historic-mean, and has presented these items to directors and elected officials for consideration. • See attachment pg. 2 for details Conclusion / Next Steps: • Informational, not a formal action item; BOCC receive and file; provide feedback • Finance will review with Departments & Offices to arrive at final figures for items identified in “attachment”, for incorporation into adopted 2024 budget. $0 $5 $10 $15 2019 2020 2021 2022 2023 2024 Mi l l i o n s General Fund Budget-to-Actual Variance Budgeted Deficit Actual Surplus $0 $5 $10 $15 2019 2020 2021 2022 Mi l l i o n s General Fund Budget Variance Staff Report by: Brian Carlson Budget and Finance Director Topic: 2024 Budget Revisions to Gen Fund Expenses Meeting Finance Study Session October 19th, 2023 ATTACHMENT: Detail of Proposed Expense Revisions Row Labels Proposed Reduction 0030 SHERIFF 1,486,442 2005 UNIFORM CLOTHING 7,324 2007 UNIFORM GEAR 19,160 2009 BULLETPROOF VESTS 22,800 3104 FOOD 33,339 3115 OPERATING SUPPLIES 102,600 3126 AMMUNITION 19,572 3201 FUEL 39,301 3562 MINOR OFFICE FURNITURE 34,781 3563 MINOR COMPUTER EQUIPMENT 48,187 3569 MINOR MISCELLANEOUS EQUIPMENT 38,850 4101 PROFESSIONAL SERVICES 175,000 4113 MEDICAL SERVICES 212,500 4141 ADVERTISING 25,550 4150 UNIFORM CUSTOMIZE SERVICE 18,935 4301 TRAVEL 27,481 4803 EQUIPMENT REPAIRS & MAINT 8,763 4809 COMPUTER SOFTWARE MAINTENANCE 4,700 4813 EQUIPMENT MAINT AGREEMENTS 30,550 4906 REGISTRATION/TRAINING 28,779 4915 COMPUTER SOFTWARE SUBSCRIPTION 16,200 6202 BUILDING IMPROVEMENTS 110,000 6406 APPLIANCES 35,000 6408 VEHICLES 210,618 6409 MISCELLANEOUS 216,451 0025 FACILITIES MAINTENANCE 1,328,339 3569 MINOR MISCELLANEOUS EQUIPMENT 9,589 4101 PROFESSIONAL SERVICES 1,303,750 6301 OTHER IMPROVEMENTS 15,000 Row Labels Proposed Reduction 0031 TREASURER 119,889 3101 OFFICE SUPPLIES 7,839 4803 EQUIPMENT REPAIRS & MAINT 88,350 4902 DUES & SUBSCRIPTIONS 23,700 0109 EVENT CENTER 115,000 6202 BUILDING IMPROVEMENTS 75,000 6301 OTHER IMPROVEMENTS 40,000 0026 NON-DEPARTMENTAL 105,000 4101 PROFESSIONAL SERVICES 105,000 0027 CORONER 40,000 4129 AUTOPSIES 30,000 4151 INTERGOVT PROFESSIONAL SERVICE 10,000 0029 PROSECUTOR 21,781 4301 TRAVEL 9,781 4451 INTERGOVT TAXES & OPER ASSMTS 12,000 0017 INFORMATION TECHNOLOGY 8,800 3561 MINOR OFFICE EQUIPMENT 8,800 0016 COMMISSIONERS 7,183 4301 TRAVEL 7,183 Grand Total 3,232,435