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Home My WebLink About35-Workshop ~ f Agenda for San Bernardino City Council December 17, 2001 1. Call to Order - Mayor Valles 2. Bill Chavez a) State Budget overview 1) Deficit 2) Revenue Projections 3) Roll over until 2003, all or part of deficit? 4) Revenue bonds for power purchases 5) Economic turnaround in 2002? 3. Chuck Bader a) Vehicle license fees 1) backfill or reinstatement b) Property tax - new ERAF? c) Sales tax redistribution 1) AB 680 (Steinberg) d) Housing Elements 1) SBQIO (Dunn) e) Workers Compensation 1) Union initiative a) Cost to employers - $6 billion 2) Bills vetoed by the Governor a) Cost to employers - $3 billion 3) Governor's plan a) Cost to employers - $450 million 4) Negotiations 5. PolicelFire Sales Tax Measure 6. League of Calif. Cities municipal finance initiative 7. Discussion 8. Adjournment - ...J.I- 7. ( , ute. 14. ZUUI IU: IW! LtA~Ut U, CAL CITIti NO, 2823 P. 2 " i COMPARISON OF TWO BALLOT MEASURES Local Revenue Accountability Act Revenue Protection. Requires state to reimburse when il: (I) Increases local govt's share of joinlly funded programs; (2) Reallocates existinll local govt. property, sales, UUT, business license tax, hotel tax and other tax, fee, assessment, etc. revenue from one local government to another or to a state-created fund; or (3) Fails to appropriate funds to continue in effect statutory allocations to local governments as of 1/101 for the VLF"backfill", fine and forfeiture revenues, and revenues received under the Welfare and Inslitulions Code. New Revenue. None. Emergency ProvisloD$. Allows lhe legislature by a '1J3 VOle on a measure separate from 1M budget 10 SUSDCnd reimbursement for such diversions in any two fiscal years in a 10-year period (Option I) or for one fiscal year and up 10 two additional fiscal years if approved by the volers at the next slatewide eleclion (Option 2). Accountability. RequirCll local governments to adopt minimum procedures and policies for the development and adoption of goals and outcomes for the budget year, with public parlicipation, Also requires an annual report on accomplishment of such goals and an annual financial audit. Burden of Proof. Requires the State 10 bear the burden of proving thaI a reimbursement is nOI required. Spon$Ors: LCC, CSAC, and CSDA !: i',. LCC: O..ombor 11, 2001 , " Public Protection Act Revenue Protection. Prohibits reduction by stale of the portion of a local govt.'s "public safety services" rcvenllCll, calculated each year by local governments based on prior year's public safety services. Appropriatcs in 2003-2004 budgel amounl to reimburse for any protected revenues taken in 2002. "Public safety services" includes direct aad indirect costs for police, fire, EMS, public health; code enforcement; airport and port security, food,lairlwaler safely; elC. New Revenue; Sales Tax. Adopts new \1.% i!I!! sales tax for 10 years for: police, fU'C/EMS, public health, trauma care and emergency room facil ities, sheriff, CHP and CDF for personnel, overtime, training; equipmenl; supplies; lelecommunications; capital oullay; colltracl services and public infonnation. Provides for election after 10 years for renewal oCtax. Emergency Provisions. None. Accountability. (I) Maintenance of Effort. Reduces share of sales tax proportionately for any local gov!. that fails to maintain its 2000.200 I base level expenditures for police, firelEMS or public health (Maintenance of Effort). Excludes certain items from base year e.g., voter or court ordered lax reductions, grants, asset forfeiture revenues, one-time expenditures; and (2) Public Protection Plan and Fund. Requircs the adoption and annual updating of a Public Prolection Plan and deposil of sales tax in Public Proteclion Fund (with sub-accounts). All expenditures subject to budget process of the local govt. Sponsol'!: LCe, CSAC, CSDA, CA Prof. Firefighters Assn., CA Hospital Assn. , CA Sheriffs Asm., PORAC, CA Police Chiefs Assn. and CA Fire Chiefs Assn. 12/17YOl MON 11:45 FAX 916 441 4577 STRATEGIC ED SRVS 1tI001 STRATEGIC EOUCA TION SERVICES BILL CHAVEZ DALE SHIMSAKl fax transmittal To: Bill Chavez Fax: 909/384.5067 c/o Terry Ruby Company: Ci1'y of San 8ernordino Date: 1211712001 Re: From: 8ill Chavez Poga (including COWl' 19 pgs. page): [J Urgent D ~... ~ D Far V_ Ii4\. nod"", 0 PlIGsc AI1lllI o ..... Yolr llequut Cv.,.,,....,I..: 1130 K STREET. SUITE 250. SACRAMeNTO, CA 85811. TEI.; 91......38Gt. FAX; 8........0n E-MAIl; GENERALMAI LGSTRATEGICADVOCATIS.CCM 12/11/01 .ON 11:46 FAX 916 441 4577 STRATEGIC ED SRVS ~002 (I) OFFICE Of' THE GOVERNOR November 14, 2001 To: Agency Secretaries Department Directors Constitutional Ollicel$ As you know. CaliftJrnia Is facing the steepest decline in state income in more than half a century. California's economy, which was beginning to slow before the September 11'" tragedy. has been dramalil;aUy alf8cted by the results of the terrorist attacks. Even though California continues to Outperform the rest of the nation in virtUally all economic indicators, the effecls 01 the attacks have severely undermined consumer confidence. tourism, and other businesses. Prior to September 11". the Legislature and my Adrnini$tralion took steps to address an anl/cipated shortfall, including setting aside the lalvest reserve fund in two decade$. In the aftermath of September 11"', I also directed each department and agency to heze new hiring, cut operating expenses by $150 miUion, and prepare 15 percent budget reductions for the 2002-03 fiscal year. However, the extraordinarily rapid decline in State revenues require$ additional reducIlons in current year spending. I have disCussed options for achieving current year savings with the legislative leadership and will submit to the legislature a revision of the 2001-02 State Budget tor consideration during an Extraordinary Session commencing in January. Until the legislature is convened in Extraordinary Session, I am directing each agency and department to lake all actions permitted under law to suspend allooation of those current year expenditures listed in the allached document. Administratively "fnIezing" these expendllures wift capture the propo$ed savings now and preserve the legislature's ability to consider ltIld act on these revisions along with other budget year reductions when ~ convenes in January. In preparing this proposed budget reVision, the Administration has taken care to avoid suapending any expenditure that may PJVVlde economic stimulus in the near term. If any agency secretary or department director detennlnes that it is noIlegally permissible to suspend a1loc:atlon of funds for a particular program. or that the SU$penslon would cause further economic harm, I direct him or her to conlaclthe Department of Finance 10 review the matter. Sincerely. J:1~ t->.,.~ Gray Davis Goverr.or Gray Davis Sacramento. California 95814 (9i5l445-284i 12/17/01 MON 11'46 FAX 916 441 4577 STRATEGIC ED SRVS JaJ003 PRO REDU . {4t SPE ......~.. NOVEMBER 2001 12/17/01 MON 11:46 FA! 916 441 4577 STRATEGIC ED SRVS ~004 OVERVIEW .-' The U.S. and california economies are experiencing a significant slowdllwn. As a result, the State General Fund is experiencing a dramatic decline in revenue that necessitates prompt actlon to curb current-year General Fund spending beyond the hiing freeze and operating ellJ)el1se and equipment expenditure reductions already ordered pursuant to Governor's Executive Ord8l'S 0-48-01 and 049-01. This document proposes B number of current-year General Fund spending reductions tota~ng $2.:i!48 billion, whiCh al80 represent $758 million in Bddilionef potential budge'-year savings. In addition to the $13 million atlributable to the hiring freeze and the $150 million attributable to the state operations reductions, the specified reductions are comprised of pl'OpO$8ls to suspend program ellpilnsions, delay new prognIm implementation, capture savings from contracts and grants yet to be bid or awarded, defer purchases, and revert unspent funds. No reductions have been proposed for programs that provide immediate-term stimulu$ to the State's economy. ~ ECONOMIC UPDATE ~ California's economy, aIfeady slowing prior to the terrorist attacks of September 11.h. shows further signs of weakening, with prospects for a prompt recovery dimmed as a resuIl of the attacks. However, California continues to outperform the rest of the nation in virtually aU economic indicators, Although the state's 4,300 drop In nonfarm jobS amounted to only 1 percent of the nationwide I06S of 415.000 jobs last month, the slowing of job growth in California over the last several monthS has been dramatic. CaIIfomia's unemployment rate rO$e 0.3 percent to 5.7 percent in OOllber. with the unemploymerlt rolls growing by 47,400. Nationally, the jobless rate jumped 0.5 percent to 5.4 percent. caUfomia's air tran&J)oJllatkn1 and lodging industries appeer to have suffered more than other sectors sinCe the September 111h attacks. losing 4,300 jobs. or 10 percent of the national losses, and 3,500 jobs, or 8 percent of the national losses. respectively. Prior to September 11th, the SHicon Valley and San FranQlICO Bay Area were aIfeady slowing markedly as a result of the decline in acIiIrity in the high-tech sector. Additionally, September construction data Indicate building activity slowed dramatically, will both residential and nonresidential construction ellpeIiencIng the weakest month of the year. The Department of Finance's 2001-02 May ReviSion economic forecast, on which the current-year budget is based, was more conservative than the consenllUll at the time. projecting very slow growth throughout 2001, with stronger growth beginning early next year. However, the terrorist altacks of September 111h will re&uIt in continued IlCOI1Omic weakness through at least the first half of 2002. Moreover. weaker S10ck market perlormance In the SI9COnd half of 2001 will contribute to a significant decline in current-year revenues. I REVENUE UPOATI! October General Fund revenue receipts were $220 million below the 2001 Budget Act forecast. To date. fisca1 year 2001-02 General Fund revenues are $827 minion below expectations. Combined willi our preliminary estimate of $614 million In Jower.than-projected accrued revenues for the prior fisc:aI year. the total fiscal year-to-date and prior-year shortfall is over $1.4 billion. October personal Income tax receipts were $209 million below projllCtiOn. Withholding was $60 million below the forecast. and refunds were $128 million higher than anticipated. Sales and use tax l1!Ceipts were $7 miHion below the month's forecast. and bank and corporation tax receipts were $10 mHlion below the forecast. I ...... 1 12/17/01 MON 11:47 FAX 916 441 4577 STRATEGIC ED SRVS EXPENDrrUREREDucnONS I BUSINESS, TRANSPORTATION AND HOUSING AGENCY Department of Houlling and Communlty Development -S101.9 million Eliminate Job8IHousing Balance Progl'Ul: This new program would provide incentive payments to cities and counlles that increase the number of housing permits they issue in calendar year 2001_ The program would not begin awarding its fir&t grants until February 2002 from funds provided in the 2000 Budget Act. It is proposed that the program's entire balance of $59.7 million for incentive grants be returned to the General Fund. Eliminate Downlown Rebovnd Po...,. am: This program has $1 mUlion available 10 local entities for planning $tudies 10 find inlill sites In urban areas, and $3.1 million for loans 10 lOCal entities for projects that convert industrial and WlI."ercial buildings to residential U1ie. It is proposed that these funds be returned to the General Fund. Reduce llultifamily Housing LolIns: This Is a general-purpQ$8loan program for construction and rehabifitation of affoIdable multifamily hOUSing. It is proposed that the $89 miUiQn available for this program in 2001.02 be reduced by $45.1 mmion, which is the amount projected to be loaned to projecls !hat would not begin construction until 2003. This preserves 543.8 million for projects that can stimulate Califomia's economy in fiscal year 2OO2-Q3. Department of Tl1Insportation -$20.0 million Shift Fund Source for Intercity Raif Projecta from tIJe Gene/'al Fund 10 the Stltte Highway AClXHlnt: It is proposed that the remaining balance of a 2000-01 appropriation of $20 miNion from the General Fund for a double-tracking project on the San Joaquin Corridor be replaced with an appropriation from the stale Highway Aocounl. Expenditures for this long-lead project are not likely to be Significant untlI fiscal year 2002.03. Department of Motor VehicleS -$117.7 million RfMII1 U"".edefi Funds Set Aside for SIIrOfI /mpa(;t Fee Refund$; Thill program reful1d6 the $300 fee that was charged 10 bring an out-of-state car into California from 1990 to 1999. This fee found to be illegal by the court5, and an appropriation of $665 miUlon from the General Fund was made in 2000-0110 creatlI a special fund for refunds. That amount was based on an estimate of !he total number of persons who may have paid thill fee. However.the Department's latest estiJ ,Idle of !he amwnt of refunds likely to be paid showllthat $117.7 miUion in expedl!ld savings can be returned to the General Fund. This reduction will not alfecl any right to a refund if one was claimed. 2 1iJ005 ~ "- ~.. ---1- 12/17/01 ION 11:48 FAX 916 441 4577 STRATEGIC ED SRVS III 006 I TECHNOLOGY, TRADE AND COMMER~E AGENCY 435.9 million Reduce IJiomN$ Gnrrta Program: This three-year program provides grants to operators of plants that convert biomass fuels \Q energy, helping those plants \Q compensate for lower elec1ricity sales prices that applied to them when they were built. In 2000-01, grants were awarded to 12 plants totaling over $8.9 million. Applications for these funds for 2001-02 are not due un1iI November 28. It is pIOposed that the $5.5 million of the $11.5 mllIion available in 2001-02. be reverted to the General Fund, retaining sufficient funding to keep previous.year QI8Iltees operating. Eliminate Funr/$ for Two unopelled Foreign Tracie 0IIJces: The 2001 Budget Act contains funding of $297.000 for a contract for representation in Indiil iII1d $160.000 for a contract for an oIlice in the PhIlippines. The TTCA has not yet opened new trade ollicas in India and the Ph~ippines. Therefore. it is proposed that then funds be reverted. ReveIf Balance of Renewable Enerr1y LHn Guanntee Fund: Chapler 8, Statutes of 2001, First Extraon:Iinary Session (AB 29X), created a new Renewable Energy Loan Guarantee program. Because of a technical drafting error in the way funds were appropriated to pay banks in the event of defaults on guarantees In the authorizing legislation. funds cannot be committed for the life of the loans. and the program cannot be implemen1ed. It is proposed to revert the $29.9 million that remains availaole for this program. t ~ REsoURCES AGENCY Secretary for RHouI'ClllJ -$11.0 mUlion I River P/ulcway Program: The Administration proposes to eliminate funding for the following River Parkway projects: Los Angeles River-South: $5 million Tuolumne River Parkway: $5 mlIIion Olay River Part<way: $1 m~1ion Tahoe Conservancy -$4.. million Land Ar:quisJtions: Of the $8.2 million in the 2001 Budget Act for acquisitions to prevent degradation of water quality that WOUld occur if the lands were developed; or \Q restore lands ilt already degraded sites, agreement has been reached to acquire a piece of proptIrty for $3.4 miUion. The balimce of $4.8 million has not been enCUmbered and is proposed for reversion to the General Fund. These land acquisitions rTICIy be eligible for funding from future bond proceeds. 3 1%(17(01 HON 11:48 FAX 918 441 4577 STRATEGIC ED SRVS ~007 California Consenmion Corp$ -$3.2 mm/on . AS 29)(, Powerwallr Progt1lm: Chapter 8. Statulllli of 2001. First Extraotdinary Session (AS 29X) appropriated S20 million to the Corps to disseminate energy conservation information and low energy lig/lt bulbs to Calitbtnia residents. To dale, $16.1 mijlion has been expended. The balance of $3.2 million is Plllpoli8d for reversion. Energy Commission -$34.6 millioo Agl'H;uItuR/ Peak Load Demand: Chapler 7, Statutes of 2001, First Extraordinary Session (SB 5X) appropriated $86.3 mlllkm to provide grants to the agriculture induslry to install energy efficient hardware and other conseMllion mechanism to reduce peak eleclriclty load demands. Of this amount. $29.4 million has not been encumbered and is avallable for reversion to the General Fund. E1tpeditfld Power Plant SIting AppIif:ations: Chapter 12, Statulfl$ of 2001. First Extraordinary Session (56 28X), appropriated $3 million to help cII8s and counties elCp8dite reviews of eIectriclJl power plant siting applications by hiring consullants and ltalning local employees who would specialize in power plant siting iSsufl$. The program, hOWllV8l". has been slow to develop, and none of the funding has been encumbered. Data CoII<<:tlon and Fuel Cell Planning; The 2001 Budget Act includes $0.3 million for preliminary drawings for hydrogen fueUng stations and $1.9 million for eledricity consumption dcrta coIlec1ion. none of which has been encumbered. Therefore, these funds are proposed for revel$ion, Department of Conservation -U.5 million (lrn:hJdes $3.0 mHllon Ii'om prior yeal$.) Famrland Conurvancy Program: This program provides grants to purchase easements on agricultural lands to reduce development pre$SUl'll$. The 2001 Budget Act includes $1.5 miHkm General Fund and $5 mllfion PIJIkS Bonet None of the $1.5 mlltion has been encumbered. not has the $1.5 miNion General Fund appropriation from each of the past Iwo ye8I1I been spent Any potential neer-lenn agreemenl5 can be funded from the bond funds already appropnated. Department of Parks and Recr..llon -$44.2 million (Includes 142.2 million '""" prior yvsrs.) CeNt' Chnez Foundation: The 2001 Budget Act includes $2 miNion to construct a park and visitor center in Delano. To date, no application requesting this funding has been received. The Admini6tr8tion proposes to fund this project from Mure bond proceeds. PrloT y.., LOQII Parlrs Projects: Funding for local parlls projects Will provided in the 1999 and 2000 Budget Acts for which no requests have been 1'8ClIived. The Administration proposes 10 revert $42.2 million appropriated for these projects. Details for specific projects for which funding is proposed for reversion will follow. 4 12/17/01 ION 11,49 FAX 916 441 4577 STRATEGIC ED SRVS 19J008 Department of Water Resources ~. 414,0 miNion Power Plant ConstlUcIion BonlJSes: Under the Administration's Energy Initiative. $20 million was made available to provide construction bonuses for power plants that came on line by summer 2001. BonU$ll& were limited to 51 miIfion per project. Bonuses have been paid for three plant projects. and three more project$ iIr8 pending. Since no other projects are now eligible for thiS funding, $14 million can be reverted to the General Fund. CALFED 420.0 mRHon CALFED Gran..: The 2001 Budget Act includes $81 million, less $3.5 miUion for Section 3.9 reductions. for CaIFed pmjec:ls. The remaining $n.5 miUion is for State staff ($50.8 million) and local water projects ($26.7 mHIion). Of the 526.7 million available for 1QC81 water proje~, $4 million has been committed. Therefore. savingll of $20 million could be reedily achieved in 2001-02. California Altemative Energy and Adva,";ed Transportation Flnancil19 Authority -$24.9 milHon RMeWabIe Enwpy PJ'ognm-AB Z9X: Chapter 8. Statutes of 2001. Finrt Extraon:linary Session (AS 29X), appropriated $25 milflOl1 to the Califomia AItemalive Energy and Advanced Transportation Financing Authority for ptJI'pO$8li of establishing the Renewable Energy PRlgr&m. To date, none fA the funtb have been allocated. and only a minimal amount has been expended IoW8rtls adminislmtive activities. Suspending the allocation wiN save the General Fund 24.9 miltion. Public UtilIties Commission -uu rniItian 0i11Uld Nall.nl Gas Pvrnping, Chapter 7, Statutes of 2001. First Ex1raordinary Session (SB 5X) appropriated $9.6 miUion to conduct energy efficiency audits of various oil and natural gas facilities. To date, none of these funds have been encumbered and are available for reversion to the General Fund. CARE Discount; This program has been funded for several years from public goods charge moneys to subSidize 15 percent of low-income consumers' utility bills. As part of the Energy Initiative. the program was essentially doubled with a $100 mlRion GenerBl Fund appropriation from Chapter 7. Statutes of 2001, First Extraordinary Session (SB 5X) to cover rapidly increasing energy bills cmd expand the program to a greater segment of the population. To date. $14 million h8S been encumbered for outreach efforts. Due to the significant drop in energy costs related in part to lower natural gas prices, $83.8 million could be reverted. ~~_.. 5 12/17/01 XON 11:49 FAX 916 441 4577 STRATEGIC ED SRVS ~009 I CALIFORNIA ENVIRONMENTAL PROTEcnON AGENCY Air Resources Board ~ -$14.4 miNion Diesel Emhisions Redu!:tioMlEnvitontrHmtaJ Justice 1nItiIItIve: Of $48 mU60n apprQllriated for diesel emission reduction programs. $16 mlUion was appropriated for mitigation of emissions from diesel-fueled eIeclrical backup generators. To date. $14.4 miHion has not been encumbered because b8ckup generatonl were not used to the extent originally expeoted. Depertment of Toxic Substaftc;ft Control -$44.0 mINion Bro..,4IwId>.InitilJtive: For 200 1.02. $52 million was available for this program which provides Iow-interest loans to help pay for environmental investigations and clean up haulrdous materials to stimulate redevelopment of brownfield properties. To date. however, only $8 million has been expended. leaving $44 million unencumbered. ~.." t HEALTH AND HUMAN SERVICES AGENCY Emergency Medieal Services Authority -$30 million Genwal Fund I Local Assistance for Traumll CtIrII: The 2001 Budget Al;t included a one-lime augmentation of $25 million General Fund for locallrauma center support. and $5 mHIioo GeneIa. Fund for trauma system planning activities. These funds have not been expended to date. and the Administralion is proposing to revert these funds back to the General Fund. Department of AgIng -$0.1 mnlfon General Fund Chapter 682, Statu... of 2001 (AS 830): Ch<Ipter 682 requires the California Department of Aging (COAl to establish alask force. conduct a study. and make recommendations to the Legislature on or before September 1, 2002. on issues relating to legal services to seniors in California. This measure appropriates 5100,000 Gener8I Fund. IIo_r, the Governor's signing message dncts the COA "10 establish the task force within existing resoUl'C88.. Therefore, the 5100.000 appropriation win not be expanded. Dep8rtment of Alcohol and Drug Pl'Ogl'llIlls -$10.5 million General Fund Drug Medi-Cal Salrinp: The 2001 Budget Al;t included a reappropriation of $23.7 million General Fund carried forward from 2000-01. Oflhls amount, only $13.2 million is needed to pay past-year claims received in 2001-02. Therefore. the Administration proposes that $10.5 minion 6 --. 12/17/01 MON 11:50 FAX 916 441 4577 ~010 STRATEGIC EO SRVS be reverted, resulting in General Fund 5aving& based on an updated estimate of funds needed to meet past-Yllll/' obligations. This proposal maintains $13.2 million to pay past-year claims. Depar1ment of Health Services -$17.6 million Gemnl Fund c.ncer Re5wn:h: The 2001 Budget Act provided a $25 million General Fund transfer for the Cancer RllSeaf"Ch program. It is now proposed that expenditures be reduced to $17.9 million, resulting in a General Fund savings of $7,1 million. This reduction represents a very sma" proportion of the estimated $3.1 billion availat!le nalionally for these activities from private institutions, the federal government, and foreign governments. Expanded Access to I'rim8ry c.... (EAPC) Augn!entlltion; The 2001 BuOget N:J. provided $31.2 million ($23.5 million General Fund). including a $10 million augmentation. to reimburse public c1inlc$ for their cost of providing uncompensated health C8llil. This augmentation remains unexpended and is proposed to be reverted. This pl'OpClSal would maintain the $21.2 million base funding for the EAPC program. Bi-NatioMl HeeIfh~: The 2001 Budget Act provided $1 miUion for a BI.Natlonal Health Initiative to be used by the CaIlfomia Office of Bi-National Border Health In its mission to facilitate COOpet ation between hvalth professionals In Callfomia and Mexico. Of thai amount, $470,000 has been aIlocaled in 2001-02. Theretolll, the Administration proposes to revert $530.000 In un~ funds for this Initiative. Managed Risk Medical Insurance Board -$54.3 million Tobacco Settlement Fund HNlthy Farnilltl$ PI 08f8IfI Parent ExplmSiOn; The 2001 Budget,Get provided $150.2 million ($61.8 million Tobac;co Settlement Fund) to expand the Heallhy Families Program (HFP) to inClUde the uninsured ~ of Medi-Cal ;md HFP children wlfh family incomes up to 250 percent of the federal poverty level. It is now proposed that this program be delayed until July 2003, resulting in savings of $54.3 million Tobacco Settlement Fund in 2001"()2 and $160.5 miHion Tobacco Settlement Fund in 2002.Q3.Federaf approval of \he HFP parent ellpanslon is still panding. Therefore, it is unlikely State implementation of the parent expansion would occur in 2oo1..()2. Department of Mentaf Health -$0." million GemInII Fund Revert a Put1ion of Funding for Dual DIfIgnoais: The 2001 BUdget Act provided $1.9 million General Fund b three dual diagnosis plio! projects. Only $1.5 million has been allocated for two pilot projecls, and $400,000 remains unallocated and available for reversion. without affecting current service levels. 7 12/17/01 ION 11:50 FAX 916 441 4577 STRATEGIC ED SRVS ~01l Department of Community Services and Development -$58.2 miUion C3enen11 Fund Califomialow-lncotrle Home EmNgy Assistance Program (UHEAP): Chapter 7. SlBlules of 2001 (Sa 5X) appropriated $120 minion General Fund to provide energy bin assislance and weatherization seNices to certain needy households and small foster carv group homes. This funding is available for expel'1dltunl thtough January 2005. The Department of Community Services and Development eJlPllI1ded $21.9 million in 2000.01, and is scheduled to spend $75.7 milliOn In 2001-02. Of this amount, approximately $31.3 million will not be lIIlalIllbered by January 1. 2002. The balance, $22.4 million, Is planned for ~itunt in SUbsequent years. Given the current dedine in revenues, and the General Fund shortfall, this $53.7 million Is proposed for reversion in 2OO1-Q2. Revert Naturalization Servkea Program FundIng; The 2001 Budget Act provided $6.5 million General Fund ($0.3 milRon state opeI8Iions and $6.2 million local assi&tance) for this program. Contracts have not been executed with community-based Ol9aniza1ions to perform lieMC8S under this program in 2001-02. Funding for this program has increased by 225 percent since 1998-99. Therefore, the Adminlstratioo propoS811that funding for this program be returned to the 1998 level of $2 rnUlion, resulting in General Fund savings of $4.5 miUion in 2001-02. Department vf Child Support Setvic;es -S40.5 million GemInII Fund LOQfI Child Suppott Admini:strarion Incentlve$: Counties did not expand $30.5 miHlon General Fund of the State cI'Iild support incentive funding appropriated for IocaJ administration in lhe 2000 Budge! Act. Additionally. $10 million General Fund appropriated for this purpose in the 2001 Budget Act also remains unallocated. Thervfore, it is pl'llpOlled that these funds be reverted to the General Fund in 2001-02, for a toIaI General Fund savings of $40.5 milHon. Depa.tmWlt of SocMl $eIVk;es -$30.1 million General Fund Foster CaTO Supportivfl Transitional Emancipation Prvgr.m: The 2001 Budget Ad included $6.5 million General Fund to provide ongoing flnancialassiStam;e to youth emancipating from foster care. Based on current caseload pmjecliOns for lhe program. current year expenditures will be only $1.5 minion. and the remaining S5 million may be I1lV8rted with no program impact. Therefore. it is proposed that $5 mUIion be reverted to the General Fund. Fostw c.r. TranMional Housing I"_t Program: The 2001 Budget Act provided $10 million General Fund for lhi& three-year program which provides lIupervi&ed independent living arrangements that prepare youth in foster care to live on their own. Based on current caseload pmjectiolls. the combined cost for 2001-02 and 2002-03 will be $5.2 minion, leaving a balance of $4.8 million available for revet'!lion. Therefore, the Pdminislration proposes that the $4.8 mUlion be reverted to achieve General Fund savings in 2001-02. Child Welfare S8IVIces: Actual county expenditures for Child Welfare Servlces in 2000-01 _re $19 milllon G_ra1 Fund less than the amount appropriated. Therefore, this amount can be reverted wilh no program impact. 8 12111101 ION 11:51 FAX 916 441 4577 STRATEGIC ED SRVS Child Welfilre ServiCes rRlining: This training program was established by Chapter 1310. Statutes of 1987 (SB 834), to provide a statewide coordinated program designed to address the specific needs of counly child welfare services social wwker&. The 2001 Budget Ad provided $3.3 miRion General Fund for !his purpose. The Administrlltion PfOI'OSe& 1haI \he unencumbered balance of$1.3 million be reverted in 2001-02. Various Departmllllb -$19.1 million Gener8I Fund Heal'" tnsu..nce PotfabIIIty and Accounfabilily Act (HlPAA): The 2001 Budget Ad and Chapter 635, StalUleS of 2001 (S84S6), provided a total of $92.3 million ($24.3 miUion General Fund) for vatiOus department& to fund HIPAA complianc:e activities. Ellpenditures through December 31, 2001, are anticipated to be signilicandy less than the emount appropriated. Therefore. the Administration proposes thet $74.2 mUllon ($19.1 mUllon General Fund) be revertlld.CaIifomia, along with the N8tionaJ Governors' Association, is cummtly seeklng a federal 8Xl8nsion of HIPAA compliance deadUnes. , YOUTH AND ADULT CORRECTIONS Office of the Inspector General -$.1 million Augmetltafion to Estllblislr AdminislnltiYe Support Unit The 2001 Budget Ad included $520,000 to establish an Administrative Support Unit and conlracl for inforrnallon Systems support. To date. four of the five positions in the Adrninislrative Support Unit have been filled. The Administration proposes to revert $55.000 from the funds appropriated to support the Operations of \he Unit DepartrMnt of CoMlGtlons -$U million Partial Delay of InrpIementJJt/on of ""' 5OfJ.Bed Substance Abuse PI vvnun Expanliion: The 2001 Budget Act provided $3.9 mQlion for an additional 500 in-prison substance abuse treatment beds and associated aftercare funding for post-releeBe treatment The Department indicates that only 300 of \he beds WiH be brought online in the current Yfir, which flllIUIts in $1.6 million savings from the rernllining 200 beds that will not be aclIvaled until fiscal year 2002.03. Department of Youth Authority .$1.5 million ~.ClIiorJ of""' Substllnee Abuae ProgRJm EJepen.ion: The 2001 Budget Ad included $720.000 to fund treatment slots for institutionel substance abuse treatment for wards and l'e$idential aftercare treatment for parolees. The contracts associated with these services have not been signed to date, end it Is now proposed that thtiI program be n IOdilIed to provide only residential aftercare traalrnent for parolees. Therefore, only $200,000 is needed. and $520,000 is proposed to be reverted. 9 ~012 I 12/17/01 MON 11:51 FAX 916 441 4577 STRATEGIC ED SRVS .---..... Implementation at the 5u Offetrdw Specialized Counseling Program Expansion: The 2001 Budget Act induded $2.8 million to establish II 5O-bed formal sex offender treatment program at the N. A. Chaderjlan Youth Correctional Fllcility and provide 35 residential aftercare services placement beds. To dale, the Department hes expended a minimallevef of resources for this program which win be modified to provide funding only for the 35 residential aftercare placement beds. Therefore, $1,960,000 is proposed to be reverted. fnrpIementallotr at fire Mental HwIth Resources PtOfltMn EltptlII$ion: The 2001 Budget Act inCluded $4,306,000 to expand \he existing level of mental health seIVices provided to wards and parolees. To date. the Department has ellpanded a minimal level of resources for this program wl'Iich wiU be lIdjusted to provide a 35-bed mental health unit and related parolee services. Therefore. $2,067,000 is proposed to be reverted. I EDUCAnON Depon1rnent of Education -$lU3.5 million The Administnltiotl propoMS the following reductions in the Department of Education's budget: Healthy Staff GIants: S38 million of the $39 mililon Proposition 98 General Fund appropriation for a new cohort of HeaIlhy Start slte5 that will not affect existing programs. Charier School F&ciIitiN GrMfs: $5 mRUon of the $10 milUon in ProposilIon 98 General Fund appropriated for facHity grants to charter schools in low-Income attendance areas pursuant to Chapter 892. Statutes of 2001 (S8 740). Funding for this purpose has not been allocated, IInd savings from non-classroom in&lruction charters will be reduced to no more than 5 percent pursuant to the Govemor's intent peR! Ofl$et for K-12 Revwlue Limits: S35 million in Proposlllon 98 Rever&Ion Account appropriated for reduction of the PERS offset to revenue IImib pursuant to Chapter 794, Statutes of 2oo1{SB 6) in order to su8Pllnd Implementation until funding for this purpose Is appropriated in a subsequent Budget Act. Funding has not yet been lIIto...cltW. K-f2 Rfwenw Umit EqUflIlzIltlon AdjustmMt: $40 millJon in Proposition 98 Reversion Account appropriated in Chapter 891. Statutes of 2001 (SB 735) for purposes of equalization of district IllV8nuelimils pursuant to Chapter 794. 5ialules of 2001 (AB 441) in order to suspend implementation until funding is appropriatvd in a subSequent Budget Al:l Funding ha& not yet been allocated. BefoteIAIIw SchooI~: $29.7 million from the Proposjtion 98 General Fund appropriated for lllIJl8I'ISiOI1 of the Before and After School Learning and Safe Neighborhoods Pllrtnership Program. including $14.85 rnI1llon fOr a new Before Sc:hooI component aulhorlzed by Chapter 545. Statutes of 2001 (AB 8) in order to delay implementation. Funding has not yet been allocated for the new component, and costs have not been incurred by districts for the Mer School elIp&I1&ion. 10 III 013 ~ 12/1,/01 BON 11:52 FA! 916 441 4577 STRATEGIC ED SRVS III 014 High Priority Schools Grant PtDfItam: $197 million IocaJ assistance approprialion to reflect a July 1, 2002. implemenlcltion date for the High Priority Schools Grant Program Chapter 749. StaMes of 2001 (AB 961). This program was designed to improve the a<:ademk: performance of pupils in schools in the bottom five decile$, with priority being provided to the lowest peIfuI ming schools. Funding for this program has not been alloCated. Eligible schools would receive grants beginning in 2002-03. Beginning TfNIChet' $uppotf fIIJd AAessment Program: $20 million for the Beginning Teacher Support and Assessment Program. which provide& teachelll with two years of mentoring and $IIpporl after they earn a preliminary teaching aedential. This program is currently funded at $104.6 miNion. It is anticipated there will be $20.0 million in savings in this program. Peer Au;.r.nce and Review Program: $50 million for the Peer Assistance and Review Progrem (PAR), which provides rnentoring serviCll$ to veteran teachers who encounter professional difficulties. This program is cutrenlJy funded at $134.2 million. scIloOI districts also may use PAR funds to supplement the Begioning Teacher Support and Assessment Program, the california Pre-Internship Teaching Program, or any other program thlJl provides training and support to new teachers. The funding reduction rellects a decrease in the number of PAR participants. National Soard for Pror...1otuI1 Teedllng StlIndetds cwtif#Qtion 1nr:enIiY'e$; 55 million for the National Board for ProfesslonaI Teaching Standards (NBPTS) Certification Incentives Program. which provides teachers who earn certification by this organization with $10,000 bonus... NBPT5-<:eItified teachers who agree to teach in low-performing schoOls are provided an additionlll $20,000 bonus, which is payable over a four-year periOd. Based on expenditures in the past. it is anticfpated that there wiD be unutiUzed fuod$ in 2001-02. Teaching As A PriorIfy BIocIr Grant; $20 million for the Teaching As A Priority block grant, which provides schools renked in the bottom live deCiles of the Academic Perbmance Indel< (API) with grants to provide recruitment and retention bonuses to fully credentialed teachers. Participating schools that are ranked in the bottom th.... deciIes of the API currently receive $44.00 per student, while schools ranked in the fourth and fifth deciles receive $29.00 per student. It is anticipated this program wiD have $livings in 2oo1..Q2. High SchOOl Coach TRining: $1 million for the High School Coach Training Program, which is intended to provide high school coaches wi1l1 training in sefety..related topics such as CPR. Expenditure l1lCtlI'ds indicate that 1I1is program has not been utiliZed. Cerliticafed Staff ,..,fol'm,,,," Awards: $50 milUon for the Cllltificated Staff Performance Awards Program. which provides bol1U688 ranging from 55,000 to $25,000 to certificated staff in schools 1I1at achieve significant, sustained growth in their API scores over a two-year period_ The number of rewards wiH be reduced to the foUowing levels. 500 certificated staff recaivtt bonuses of $25,000 each 1.875 certiIk:ated staff receive bonuses of $10.000 each 3.750 certificated staff receive bonuses of $5,000 each professiotHll Dlnetopment InSfiMe Stipends: $6 milUon of the General Fund appropriation for stipends. The 2oo1-Q2 Budget, which contains $54.0 million to provide $1.000 stipends to te....i..rs who attend the University of California-administered Pro~ional DeveJopment Institutes (POt). These saving& in stipend payments conform to anticfpated demand for the POI by school districts. 11 12/17/01 MON 11:53 FAX 916 441 4577 STRATEGIC ED SRVS K.1Z Per Pupil8lock Grant: $67.8 mntlon appropriation in Proposition 98 Reversion Accounl for the K.12 Per Pupil Block Grant program, which providel; grants of $12 per pupil to all school districts and county offices of education to be spent on a variety of categorical programs. "- High Tech High: Delete $4 mHlion oflhe$10 ml160n from the Proposition 98 RevelSion Account for the High Tech High grants to reflect a reduced level of funding for High Tech High Schools anticipated to open in Fall 2002. To date. none of the funds have been allocated. Digital High School: $15 million Proposition 98 for the Digital High School prggram. This program provides appmximatefy $45 per pupil for technical support and professional development in perticipaling schools. The program has not spent its enUre $76 mllIion budget allocation in the past, and this proposal rellects program 5avings resulting from less than anticipated participation. One. Time Energy Relief Funding: $250 million Proposition 98 General Fund for energy relief for K-12 schools. These funds were provided on a one.lime basis to address higher than anticipated entlt9y costs. This funding hllli not yet been allocated to schOols. Given that ene'llY costs have not increased IIli much as expected due, in part. to lower natural gas prices. this funding can be eHmlna1ed in 2001-02. 9th Grade Clas Sift RHuctiotI F'rogt'am Savings: $10 minion Proposition 98 General Fund for the tj" Grade CIess Size Red\Iclion Program. The 2001 Budget f>d appropriated $145.2 m~~on to allow schools to reduce 9'" Grade English and one other core class to a 20:1 ratio. Program participation has been less than anticipated this year, resulting in alle8$1 $10 million in program savings. California StlIm Ubl'llry -17.9 million Pub/k: Ubr.ry Foundation: The Public Library Foundation Program provides grants to local libraries, based on populalion and the amount of funding provided thl'Ough the budget. The 2001 Budgel f>d contains $52.9 million for thili program. Localllbrarles use the funds for acquiring tibrury materials. staff. opentting expenses and equipment. To date. none of the funds have been a1~. The Adminisbi;ltil.Rl proposes to revert $T.9 million (approximately 15 percent) of the G_ra1 Fund appropriations. I HIGHER EDUCATION C..lfvmla Community Colleges -$5.0 million TIIaCher and Readinr Development P.memh/p$: The AdminiltraUon proposes to reduce $5 million of the $10 million Proposition 98 Reversion Account appropriation for Teacher and Reading Development Partnerships. This program, which encourages undergraduate college students to Sll8k teaching careers wh~e advancing K-12 reading improveme.lIs, has not been fully subscribed. Remaining funds would support grants at many colleges. .~ 12 1aI015 t 12/17/01 MON 11:53 FAX 916 441 4577 STRATEGIC ED SRVS University of California -$86.0 million Shift Fund SouI'Ce for Science /natItutes to Bonds: The 2001 Budget Act appropriates $95 m~fion from the General Fund for the University of earlfomia Institutes for Science Innovation. A11e8st $50 million can be shifted 10 Lease Revenue Bonds. Tuchirlg HospQJ$: The Administration pl'OpO$es 10 revert $5 miOion for clinical teaching support at the University's medical ce"lta $, neuropsychiatric inslltutes. and dental clinics. These funds were provided in the 2001 Budget Act and nave not yet been fully expended. Nnnl G.s Funds: The Administration proposes 10 revert $25 million of the $75.6 minion appropriated for unanticipated increases in natural gas costs in 2000-01 and 2001-02. Energy costs have not increased as anticipated due. in part, 10 lower natural gas prices. The University may reduce non-impactsd campus aHocations as neceSSillY 10 achieve an equitable reduction with regard 10 energy cost pressures. PrvtwHionlll De'lf1lopment Institutes: The Administration proposes 10 revert $6 minion of the $56.9 million appropriatlld ror teacher training 10 conrorm 10 anticipated demand from K-12 dlsbicls. A simHar reduction for related stipends is being proposed in the Department of Education's budget California State UniYetsity (CSU) -$20 million Natural Gas Funds: The Administration proposes 10 revert 120 million of the $34.1 mmion appropriated for unanticipated increases in natural gas costs in 2000-01 and 2001-02. Energy costs nave not increased as antidpated due, in part. 10 lower natural gas prices. The CSU may red\lce non-impacted campus allocations as necessary 10 achieve an equitable reduction with regard 10 enlllVY cost pressures. ~~ Department of Information TKhnology -$0.7 mitllon Delay omce .ove; This reduction reflects 2001-02 savings from delaying the Department of lnformlllion Technology'S relocation. Since the department has not committed these funds. the Iotal is available for l'lIVeI'Sion. 0fllGe of Emergency s.rvices -$1.0 million The Administrllfiorl proposes the foIIowiIlfI ",.eI~ivn: Tri-Net Expansion Star.WJd&: $1.0 million which was to aupport \he expansion of the earthquake monitoring system currently in operation in Southern CalitOmia to Northem 13 ~016 I 12/1(/01 XON 11:54 FAX 916 441 4511 STRATEGIC ED SRVS ~OlT California. These funds are available for revlll'9ion since no expendilure5 have been made at this time. Department of Consumer Affairs -$44.0 million Consumer AS$lstanee Program: The Administration proposes to transfer $44 minion from the High Polluter Repair or Removal Account to the General Fund. These funds reflect the remaining monies. pIUS interest. collected !rom the Smog Impact Fee. Office of Crll1\Inal Justice Planning -$82.0 million Los Angeles Crime LabonItory: This reduction reflects the estimated cost of construclon for the Los Angeles regional crime laboratory authorized by the 2000 Budget Acl The construction phase of the laboratory projec:t is not 8llpected to commence until 2003-04. Funding for construction costs wiD be shifted to state-financed lease FllVenue bonds. and ultimate ownership of the facility will be transferred to the City of LOS Angeles and Los Angeles County at the end of the financing term. California Arts Council (CAe) -$5.1 million CAe Grant Funds: The Administration P~fi to revert $5.1 mlUion from the California ArtS Council for local grants to assist art Pf'Oll/'8ItlS. artists, and loCal arts councils. This remains to be allocated to local agencies and is. therefore. available for reversion. Department of Industrial Relations .$1.0 million Simin... Worllw s.r.ty Training Gnlnt Prognun: This reduction reflects savings resulting from the elimination d the Worker Safety Training Grant Program. which was .mabIlshed in the 2001 Budget Act to award gren/$ to organizations that provide training for wor1u!rs in high haurd industries. Funding for this program has not yet been allocated. Therefore, the monies can be reverted. Military Oepattment -$2. 1 million Tumirrg Point ACMlemy: This reduction reflects the savings associated with decreased Academy expenditures resulting from a lower projected cadet population. 14 12/17/01 MON 11:54 FAX 916 441 4577 STRATEGIC ED SRVS ....-.- fSrATEWlDE Statewide JanitoriallCol.b..c.t Services -$2.0 million ~ Unall<<etvd JaniforiallContract Service$ Balance: This reduction refIecls a portion of the unallocaled balance from a statewide budget item that provided for the allocation of up \Q 13.0 m~1ion \Q fund the increased cost of pet!Onal &<<Vices contracIs as a result of providing employM benefits to various categories of contract pelSOnnel. Since these monies have not yet been allocatlld, they are available for lllv8f$ion. Statewide utilities Coats -$64.2 million Bimhlfml UtilitIes Costs Funding: This reduction reflects the savings associated with the eUmination of a statewide budget item that provided for the allocation of up to $64.2 m1Hlon \Q departments experiencing increases in u1iIi1Ies COSbl. This item Is being eUmlnated to due to decreases in the cost of gas and electricity from teve1s projected during the 2001-02 budget development process. Postage Rate lnCIH$4 -$3.0 million Requests for the 2000-01 and 2001-02 fiscal year augmentations from the statewide postage rate increase item are lower than initial budget estimates. resulting in a statewide savings over two yetin; of $3.0 million. Hiring Freeze -$13.2 million The Governor issued Executive Order 0-48-01 to implement a hiring freeze for Slate agencies and departments. Since the hiring freeze prohibits the us. of new hires to fill Slate positions. excluding 5PllCified posililQ related to public health, safety. or security. and other positions producing State revenues. the hiring freeze is estimated to result in General Fund savings of up to $13.2 mUIion for the remainder of 2001-D2. Reduction In OptIIMtlhg Expen_ and Equipment -$150.0 million The Governor's Executlve Order 0-49-01 directs departments to initiate various cost reduction measures to effect a minimum $150.0 m~1ion statewide reduction in current year operating expenses and equipment costs. These cost reduclon measures include c:anceIing or postponing any non-essential trips; reducing, canceling, or posIponing any new contract or agreement for goods and services: and when po$Sible, canceting and disencumbering the balance of any 8XisIing conttact or purchase agreements. The objective of lhls cost reduction '- measure is to adlieve a statewide SllYing$ of at least $150.0 m1Hlon. 16 ~018 ~ 12/~7/01 MON 11:55 FAX 916 441 4577 STRATEGIC ED SRVS ~019 Past Years Disencumbrancea ~'-' -$25.0 million (for 2001-01 and 1999-00) In accordance with the Governor's ExllCUtive Order ~1. departments were directed to cancel certain prior-years contracIs anc;t purchase orders for which goocls anc;t selVices had not been received and diSencumber the balance. Savings are estimated at $25.0 million on iii statewide balmI. Local Dilttrlct Projects -$30.0 million The 2001 Budge! Ad intIuded a total of $66.5 mftlion Gerleral Fund for local district projects. It is possible that up to 50 percent of the funding has not been alloc:aled. Reverting the unallocated funding will IiIM! !he General Fund approximately $30 miHion. Details relating to specific projects for which funding is proposed to be eliminated wiU follow_It is the intent of the Administration to Il$!8b1i1h en exemption meehaniam to IIl1IllJre thlI! projects for which re60Urces have been committed are not jeopardized where a reduction in funds would result in a Ios6 of jobs. '-' 16