Board of Supervisors — 2022-04-11

Good morning,

and I'll call to order the April 11th 2022 meeting of the Santa Barbara County Board of Supervisors and budget workshops for fiscal year 2022 through 23. Madam Clerk will you please call

Thank you and Madam Clerk any announcements? Chair Hartman and members of the board I do have a couple quick announcements this morning. I would like to remind the public that the Board of Supervisors meetings are being interpreted and broadcast live in Spanish We are broadcasting our meetings in Spanish both for Cox Cable subscribers in South County as well as Comcast Cable subscribers in North County. Members of the public can now view our meetings in Spanish by turning on the secondary audio programming, also known as SAP or SAP under their language settings. That information will also be scrolling on top of your TV momentarily.

Lastly, I would like to remind the public who are participating in our meeting today of the board's updated methods of public participation. For the Board of Supervisors' methods of public participation and to provide general public comment or an item on the board's agenda, please see page 2 of the agenda. Members of the public can attend meetings in person both in Santa Barbara Board Hearing Room Chambers as well as the Santa Maria Board Hearing Room Chambers.

Please note the board is following all local and state guidelines and are no longer requiring face coverings indoors. If you attend the board meeting in person, you will no longer be required to wear a face covering but please be advised that the Public Health Department is still strongly encouraging all county staff and members of the public to mask and socially distance themselves in crowded areas.

I would also like to remind the public that if you require any special accommodations please contact the clerk of the board to make that request preferably on the Friday prior to the meeting Individuals that would like to provide verbal public comment virtually may do so via Zoom by registering in advance via a link available on page 2. After registering, you will receive a confirmation email containing important information about joining the virtual meeting. Once the chair has announced the item you want to comment on, please join the meeting with the information provided. You'll be placed on mute until it is your turn to speak.

The clerk will call you by name and when removed from mute, you will hear a notification that your line has been unmuted. If you are using a touch-tone phone, you may need to press star six to unmute yourself. Again if you're using a touch tone phone, you may need to press star six to unmute yourself. Each person may address the board for up to three minutes and this is at the discretion of the chair.

If you have any questions please contact the Clerk of the Board's Office at area code 805 5 6 8 2 2 4 0 again that number is eight zero five Five six eight two two four zero and that concludes my announcements for today.

Thank you madam clerk So that brings us to the business of the day the first day of our budget workshops For fiscal year 2022 23, and I just want all members of the public to know that there'll be opportunities to comment after each functional group presentation and also after each special issue presentation So I'll now turn it over to our CEO, CEO Mia Sato.

Can I get the slides up please? Great thank you so much. So good morning everyone. Today we begin the first day of three days of budget workshops and our theme this year is reset reimagine and reconnect as we exit two long years of this pandemic. Next slide please. So the agenda for this week is I'll be talking a little bit about the preliminary budget in its context, and then Assistant CEO Nancy Anderson will give an update or overview of the preliminary budget.

Thank you for that. And then you'll hear from departments. Today we'll hear from Health and Human Service Departments and General Government Support Services. On Tuesday, Public Safety Departments, Community Resources and Public Facilities, and there will be a special issue on maintenance and capital projects And then we end the week on Thursday with the policy and executive departments. And here are two special issues, one is on digital transformation and an update on ARPA funding. And then at that time your board can deliberate and provide any direction as appropriate to my staff as we start developing the recommended budget.

Next slide, please. So as you know the purpose of these workshops is to present the preliminary budget and as materials indicate the preliminary budget is balanced as of today but there still are changes ahead and so that will be changing from now until the time that we actually put the recommended budget together. We provide a summary of the department's budgets their major work efforts for the coming year and expansion requests and updates on the renew initiatives As I mentioned, we'll present three special issues this week. And again, this is the time to allow for your board's discussion, questions and to hear public input on anything that's presented this week and to provide direction to myself and my staff on any policy issues or particular items before we complete the recommended budget.

And before I get into the context, I do want to take this time to say some thank yous. First and foremost, thank you to all our department directors And their staff, particularly their fiscal officers for developing their budgets this year and working collaboratively with the county executive office. Secondly, the auditor controllers team under the direction of the auditor controller Betsy Schaefer and assistant auditor controller Ed Price and thank you to Juan.

I'm sorry Juan, I always have to stumble over your name. Juan Izquierdo, Joel Boyer, Stephen Herrera, Joel Flores, Tyler Walker and Jeff Arthur thank you to all of you for working with our staff and a special thanks to my own budget staff led by Nancy Anderson our assistant CEO and Budget Director and Paul Clemente our Budget Division Chief and all our analysts Richard Morgantini, Nicole Parmalee, Wes Welch, Reese Elstead, Steven Yee, Dina Grassi, Ted Tiber and Sarah Gill. So thank you for all your work and their work will show as you see the presentations going forward. Next slide.

So why did Mona put this slide up here? That's my staff is probably asking. Why did she interrupt the flow of our nice presentation by putting this in here? Each of these I believe represent our clients, our patients, our customers, our residents, our community partners and all of our employees. And as we exit this pandemic, I think we are at an inflection point.

And we have to be careful in believing that we can snap back to where we were in 2019. We're different. We've all changed. Our employees have changed, our residents and our customers and our clients have changed some I'm A default position for many of us and I say that out loud because it's a cautionary tale to myself as well. So, as we proceed in this next year's budget it's just to remind ourselves that we can't snap back and we shouldn't. And what you'll see in this budget are different things that departments have done to respond to the pandemic. Some of the things they're going to be keeping, some are going to jettison but it's important for us to remember that organizations tend to be like rubber bands and if unless the organization fundamentally changes after a period of time it tends to snap back to its previous form and so we're trying to guard against that.

Snap back and take things that we value But also incorporate the changes that we've learned over the last two years. So I ask that everyone remember that and pause when there's a new initiative, when there's deadlines to pause and just make sure are we snapping back or have we learned from our experience? Next slide. And so that's why the theme for this year's budget is reset, reimagine, reconnect.

Reset by definition is to start again anew And it's to work differently, and that's what we're doing. We're optimizing technology. We have a hybrid workforce. We're adapting our processes, but we're anchoring in the renewed values and behaviors. To reimagine is to reinterpret imaginatively, to rethink and reframe, and you've seen this The board has done this. We've embraced inclusion and equity, we have all this federal stimulus money, we're continuing to work on climate change and improve our disaster resilience but I think the pandemic has shown the need to reinforce our safety net and help those with less opportunity recover.

And finally, to restore connection to our community, our customers, to each other with new and traditional ways of serving them Continuing collaborations and reengaging our focus. And so the board's focus areas continue. And that's to have improvements to the criminal justice system, to ensure we're an environmentally sustainable community and your board had just had a discussion on the energy climate action plan, to continue to make progress on infrastructure improvements and deferred maintenance, to improve community amenities, recreation in open spaces, to preserve and strengthen our safety net, to embrace equity inclusion, and to ensure this is underlined by all All of this is underlied by stable finances and prudent reserves.

So I'm going to spend a few minutes just talking about the economic context, and this is from the Anderson forecast at UCLA. And basically they've said that the economic impact of the pandemic has abated. So you see in 2021 there was strong GDP for the country. It's so economy is showing Signs of returning to normal, consumption was shifting more towards services and away from goods. And supply chain problems were easing but they still exist.

Inflation however is expected through 2023 and employment rates have recovered quickly and full employment is expected to be reached by 2022. Next slide. A couple things that we need to be wary about and that obviously is inflation The Federal Open Market Committee last month increased the federal rate by 25 basis points and it's expected to continue to raise the federal funds rate throughout the year, which mean we expect to see a tightening of money in the economy and to cool down demand.

The federal government purchases are expected decline in 2022 relative to 21 levels, and obviously there is concern about the Russia-Ukraine war. In California, the state budget picture has improved and it surpassed revenue projections Three sectors have driven the California economy, the first being leisure and hospitality followed by professional scientific and technical services and administrative services. However, hospitality is being impacted by work from home. It's interesting the concentration of tech and office related employment in the state creates a situation where work from home is more prevalent than other places when offices are empty so are the restaurants and nearby stores and tourists are visiting large cities with international airports Which are the same cities with employment centers hit hardest by work from home.

The state unemployment rate for the second quarter is expected to be 5.7% and it's expected to decrease over the next few years, but the California economy is strong. It's one of the strongest in the nation right now and expected to continue to grow This is now bringing things back to our county. This is a trend in secured role value as you know, a large portion of our discretionary general fund is from property taxes so the red bars show indicate years of lower growth subsequent to a recession and the pink bars indicate a year where recession started.

So it's hard to see on this slide but you see The beginning of the graph in the early 90s, there was a recession and then the dot-com crash happened in the early 2000's and then the housing market crash. And as you see our secured role on the one hand it's positive that every year there is a bar meaning this is year over year increase in value So I want to make that clear. In some counties, as you recall with the market crash they were negative meaning they had decreases in value so we've always had increases in value but as you see in the red and after the housing market crashed the increases are very low and as you see since that time around 2013-14 you see it pick up property values have increased at a steady clip about four to five percent and in 21-22 we see a 4% increase So this is all positive.

It shows we have still a healthy secured role, however I keep mentioning it's never going to return to what we saw in the mid 2000s with those high 8%, 7% increases. Next slide. So as I've said, we have a very stable outlook next year and 22-23 will be the fourth year which we did not request or require service level reductions from our departments which is all very positive And so as we see, we have an increase in property tax sales and TOT and those remain stable. We have a lot of federal and state stimulus coming to us for recovery including ARPA which has helped us with one-time funding for critical investments and programs.

We have sufficient reserves to mitigate short term impacts and our general fund strategic reserve is fully funded at 8% of $40.6 million next year. The challenges that you'll hear from your departments as we go forward this next week is continuing needs beyond resources, meaning minimal ongoing GFC or general fund contribution for department needs. State legislative changes that continue just in more mandates, but also a loss in local revenue for some departments.

As we talked about new state and federal mandates, some of these are very good things that we look forward to, but some of them do not reimburse us fully for our costs. We've seen a tightening of the insurance market. I love to say that because that's what Ray Aromatorio taught me. We have a tightening of our insurance market and so we have seen those costs in department budgets There is a dispute with our contract cities with the sheriff that is to be resolved, but that could have an impact on the Sheriff's budget.

We have significant litigation costs and also cash flow needs for advanced bridge construction. And although the infrastructure bill was passed at the federal level we're still interpreting what that means for us. But in the meantime there are important public works projects that need to continue and so it's using general fund for cash flow. In all ways we have deferred maintenance costs that continue to grow This slide shows your board's commitments over the last decade, and it's shown here to remind all of us that when the board does make a commitment we are successful. It just takes careful planning and it takes sticking to the plan which we've done to overcome some of these challenges. So we've made several commitments. We've been able to produce great things because of those commitments, and we will continue to do that going forward.

So key challenges you'll hear again from your departments is recruiting and retaining staff. HR is going to be presenting to you today and talking a little bit about that, what they're seeing. General post-pandemic staff fatigue. So when you listen to your departments, you'll also hear about that not only when we can't recruit people than the people who are here doing more after they've been through two years of pandemic services.

Legislative changes we've talked about, and insurance premiums. And just major technology. These are all good things but they do take time. The transition into new technology does take time and it requires staff resources and focus. Next slide. But there are a lot of good things that the board has authorized and is reflected in next year's budget for homelessness and rental assistance Over $53 million has been allocated to address homelessness to date through ARPA monies and also money that is in the CSD budget for homelessness. It's homelessness and the rental assistance programs.

We continue to make progress on improvements to recreation, as well as capital improvements on bread-and-butter system replacements, roof replacements, and just to point out that we did get the federal earmarked for the Veterans Memorial Building and the Lompoc health care upgrades. Climate change adaptation, your board has given us new direction and we'll be following up on that. But meanwhile, we are continuing with the better of your solar and battery project. I think it's 90% complete and continuing to take advantage of 3CEs programs.

For deferred maintenance, the policy that your board set in place in 2014 with 18% available discretionary revenue going towards deferred maintenance has meant there is an ongoing allocation of $11.6 million. Well, you'll hear more about innovation and technology. We're doing a special issue on that and you'll see that in your different departments presentations co response and. Assistant outpatient treatment, your board had been very supportive of grants that we received to pair mental health workers with sheriff deputies out in the field. We have three teams and this budget ensures a continuation of those teams when the grants go away.

We continue to work on criminal justice improvements. The CCP will be has approved a multidisciplinary team approach with a lead and we're continuing to work on alternative sentencing as well as improving data availability and efficiency. And finally, your board is also embraced diversity equity and inclusion and this budget also includes resources to continue those efforts.

Again, the county's outlook is stable for next year and it doesn't happen by magic. It's a result from strong financial management throughout the county in your board's prudence in promoting financial sustainability as well as things the community needs. So again thank you to our directors, your board and all our community members. And I think in the last two years we have shown great resilience and collaboration and compassion.

Next slide. So this is my final slide and it is to remind us that we may not snap back to where we were, but we can build upon where we've been to create a stronger reconnected network of community. And employees, we can be imaginative and creative and innovative. Which means sometimes we might have a mistake or so as we go along in the process. And lastly, thank you for laughing at my joke.

And lastly, do we want to reset ourselves? So that we get back to being and continuing effective care for our residents, our patients, our customers, our clients as well as care for our employees. And with that I'm going to hand it over to Assistant CEO Nancy Anderson.

Good morning Chair Hartman and members of the board. Wait a minute while they bring up my slides today we are pleased to provide your board with a preliminary budget summary and workshop budget presentations by county departments throughout the course of this week Once again, the budget development process began this year in December with the Budget Development Report five-year forecast and budget development policies.

Departments submitted their budgets to our office in early February and our staff has been reviewing those submittals and finalizing the presentations for these April workshops. We will take direction from your board this week and finalize the recommended budget that will be released in late May. That will then be presented at budget hearings on June 14th and potentially 15th.

Once again, the county budget reflects a stable outlook as we head into fiscal year 22-23. We have a stable revenue growth and we've avoided service level reductions, but continue to be challenged with increasing labor and liability insurance costs. This is resulting in minimal excess ongoing general fund contribution available for expansions and other board interests due to those limited resources no workshop pre-workshop expansions were recommended As we have seen in the current year, cannabis tax revenue continues to be volatile but it is anticipated to increase slightly from the lower actual collections this year. The budget also progresses the northern branch jail operations funding plan and invests in deferred maintenance and information technology.

Your board has prudently adopted budget development policies that focus our recommendations on program-based budgeting, fiscal stability, identifying and mitigating fiscal risks, and maintaining prudent reserves. We strive to minimize use of one time resources on ongoing costs, prioritize department requests that support board priorities and policies, and take into consideration long term fiscal planning.

Like to talk a little bit about the revenue and expenditure chance that we're seeing for fiscal year 2223. Operating revenues are crucial to supporting ongoing costs related to departmental programs and services. Operating revenue countywide, that includes all departments increased 3.6% from the prior fiscal year. For fiscal year 22-23 the general fund increased 1.7%. A component of the general fund is discretionary revenue that increases 3.9%, further broken down Is discretionary revenue, which includes property tax revenue increasing 4.6% transient occupancy tax revenue increasing 23% and sales tax revenue increasing 13.6%.

This chart shows a five-year look at total operating revenue increasing by 3.6% to a total of $1.4 billion. The increase shown from 2021 to 21-22 includes the COVID related state and federal funding that the county received. This is a similar slide, but focuses on the general fund operating revenues. The 1.7% increase brings the total general fund operating revenue to $535 million. Again, the increase from 2021 to 21-22 is state and federal funding including ARPA funds.

This slide focuses on the discretionary revenues including property tax, TOT revenue, sales tax and cannabis revenue. The 3.9% increase brings the total to $340 million in fiscal year 22-23. Property tax revenue is projected to grow by 8.2 million dollars to 4.6%. The largest driver of this increase is secured property taxes comprised of residential and commercial properties that assumes assessed value growth at 4.5% due to strong market growth coupled with an increase in the volume of real property transfers. This is a 2.5 percent increase over the max CPI inflation factor or two percent for 22-23 TOT revenue is projected to increase 23% to 14.9 million in fiscal year 22-23. TOT revenue is highly dependent on tourism and the availability of lodging in the unincorporated areas of the county, and was therefore most impacted by the Panambic and the stay at home mandates.

However, revenues have since rebounded to pre-pandemic levels as the public's demand for travel has surged. Sales tax revenue is projected to increase by 13.6% or 1.7 million despite being impacted early on Effects of the pandemic, retail sales in the unincorporated county areas have returned to pre-pandemic levels and then some as consumer spending has shifted away from services and back to goods with an emphasis on the e-commerce in particular.

Okay, this chart shows the operating expenditures for the entire county. Expenditures are typically close to or equivalent to operating revenues. The difference is typically between the two are primarily increases or decreases to fund balances. Operating expenditures are growing by $50 million or 3.6% next year to $1.37 billion. Operating expenditures include both ongoing and one-time costs With ongoing costs largely supported by ongoing revenues.

One of the largest increases in the department is in the Department of Behavioral Wellness, which is utilizing $15 million an increase in state revenues in part to fund 34.8 new FTE positions. The Department of Social Services is also adding 27 FTE to maximize state and federal revenues to administer new grants and programs in the economic assistance, protective services, and workforce development board programs.

Salary and benefit costs are a major budgetary driver that affect most county operating funds. Several labor contracts have been negotiated recently or are expiring soon, and are currently in negotiations. Salaries and benefits costs are expected to rise by $27.3 million countywide. To 727.9 million dollars, making up 53.2% of the county's total operating expenditures. This slide shows the average cost of an FTE for the county at $160,000 per year That fiscal year 22-23 preliminary budget includes full time equivalent staffing or FTE of 4,442. An increase of about 93 FTE over the prior year with the most staff growth related to behavioral wellness and DSS.

In December, your board approved a policy that reinforced limited spending of the cannabis revenue. The policy includes that there would be no new ongoing expenditures beyond those approved in fiscal year 21-22 for non-cannabis related costs. Ongoing expenditures would be, of course, considered for support of the Cannabis Program and if necessary, labor negotiated cost increases. The remaining cannabis revenues could be used towards one-time expenditures and a prudent reserve of at least 25% would be maintained in the fund.

This chart shows the actual collections beginning in 2018-19 at $6.8 million dollars There was steady growth through 2021 and then a decline in the current year due to oversupply of wholesale cannabis product and its adverse impact on pricing. Projections for the current year have been adjusted downward from $19 million that was budgeted, to $12.5 million, a 34% reduction.

The fiscal year 22-23 cannabis revenue estimate is 16.3 million, a decrease of 14.5% from 21-22 adopted budget to reflect the impacts of the oversupply and the associated compression on prices. The estimate is an increase of $3.8 million from what we are expecting in the current year based primarily on the addition of new cannabis cultivators that are expected to complete the county's land use permitting and business licensing processes and commence operations Additionally, next year's overall cannabis budget reflects 1.1 million of anticipated retail storefront tax receipts.

The next two slides line out the preliminary budget resources and uses of the Cannabis Fund. We start with the revenue estimates at $16.3 million, we have prior year fund balance carryover of 9.2 million for a total available sources of 25.5 million dollars. Then we get into the recommended uses. We have enforcement costs at 3.1 million Tax collection and program administration at $1.7 million, P&D cannabis appeals and one-time permitting staff of $517,000, and then some one time commitments previously approved by your board.

The utility grade solar at $171,000 parks trails open space park grant matches that was approved by your board During budget hearings the balance of that at 3.5 million We do establish the 22 23 equita funding of 500,000 And then we have prior year ongoing commitments the 18% maintenance Funding at 2.4 million the IHSS MOU increase at 300,000 a few positions associated council GS CRA and planning and development at 1 million Cannabis education at 160,000.

Library funding at 785,000 and translation services at 50,000 We also have the prudent reserve remaining in the balance of 4.7 million And then one time set-asides related to co-response Homeless operating costs and actually some of these are ongoing Voter Choice Act and employee cost increases these are helping to Balance our budget within the future out forecast of the five-year forecast The remaining the recommended uses total twenty two point four million dollars and the remaining available sources is 3.1 million dollars Okay, this year there is limited one-time resources available for allocation. Typically there's about seven to nine million in carry forward within the general fund. This balance has been exhausted to cover cash loans for public works, for advanced bridge construction and uninsured litigation exposure to the county.

Cannabis as indicated is $3.1 million and we have $955,000 has been made available from prior approved conversion of two HVAC projects to ARPA funding this totals a little more than four million dollars for your board's consideration A major funding source again in fiscal year 22-23 is the American Rescue Plan Act or ARPA. The county will be allocated $86.7 million. The final rule issued recently on January 6, 2022 provided municipalities more options and flexibility for spending related to IT infrastructure, data resources, court backlog And other services this has allowed staff to identify some general fund backfill opportunities This information in addition to other adjustments will be discussed on the special issue on Thursday Okay, the county maintains several general funds set-asides or reserves and General County programs for specific purposes related to statutory funding board policy and future operational needs The estimated balance for key general fund reserve accounts at the coming year end is $142 million.

Taking this into consideration, specific uses of the funds that have been earmarked, the adjusted balance available for use is approximately 58.2 million. The adjusted reserve balance includes $40.6 million in strategic reserve equates to 8% of the general fund operating revenue. Staff is also proposing a new budget development policy as part of this board item that relates to the Disaster Recovery Reserve. The proposed policy is to maintain a minimum reserve of $3 million in the disaster recovery fund balance in General County for programs to fund the repair of county infrastructure damaged during disasters when no other state or federal reimbursement, or other available funding can be identified.

There are sufficient funds currently earmarked for future use to meet this minimum threshold. The policy will help to more clearly identify intended use for the set-aside balance. The preliminary budget includes the set aside of $1.4 million in the Disaster Recovery Fund, to cover the damages incurred by the Public Works Department for the Alice All Fire disaster.

So this year, the preliminary budget summary includes a section on the long-term county fiscal plan that progresses the five-year forecast with updated budgetary information that was presented to your board in December. This table shows the incremental change or growth by year specifically for the general fund. The fiscal year 22-23 column reflects the preliminary budget numbers.

Under the category column to the far left, the forecast line items are discretionary revenue and salary and benefits. The policy rows relate to board approved policy that require annual adjustments. These include the strategic reserve, northern branch operational plan, IT technology funding related to county ERP, uninsured litigation, and 18% for maintenance.

The operational line items are known or anticipated costs that the general fund is obligated to cover in some manner. For example, MOEs, statutory mandates, contractual or items related to board priorities or commitments. This fiscal plan line items help show how the county will balance the fund over the five-year period. The preliminary budget shows $1.25 million being set aside in the program stabilization reserve for future use towards anticipated labor increases.

The preliminary budget here reflects a balanced budget after the annual surplus of $339,100 is set aside in general county programs until further direction from your board is received this week. It is important to note that the preliminary budget and forecast assumes status quo operational levels for general fund departments, and no expansion requests are included. While the forecast shows deficits in two of the five years' forecasts, the final year of the forecast reflects a minimal surplus of $241,000.

To get to this positive end, the forecast anticipates significant release or use of set-asides that your board has previously approved for known increases such as general liability, co-response and negotiated labor costs. As indicated there are no pre-workshop expansions recommended this year due to the limited resources Uh, your board may recall that is set aside for data and discovery needs for criminal justice departments was approved last fiscal year. The board approved 1.25Million that could potentially be used towards various positions a data dashboard and other one time needs. The recommended allocation of those funds is anticipated in the coming months, pending the selection of a digital evidence management system and as part of the criminal justice partners improvement efforts review led by retired Judge Cheryl Ellsworth.

The public defender has two department expansion requests that relate to this work that were not included in last fiscal year. As part of the ARPA discussion on Thursday, you will hear that a portion of the 1.25 million is eligible for a three-year period which would reimburse the general fund enough to include additional costs for the public defender for fiscal year 22-23. Beyond that, for sustainability we would need to assume an allocation of either GFC or other source such as Prop 172 for the ongoing additional costs. We have included that for perspective in the general fund five-year forecast.

As previously indicated, the fiscal year 22-23 preliminary budget is balanced to ensure essentially status quo operations for general fund departments with approximately $339,100 remaining in ongoing general fund costs and $4 million in one time resources remaining available. Departments have submitted requests for budget expansions totaling 12.7 million dollars in ongoing funding and 7 million in one-time funds with an increase in staffing of 52.5 FTE Some of the requests may requalify for ARPA funding and will be added to the list The board will be considering as part of the ARPA special issue discussion on Thursday So starting with the community services department, the department has submitted a request for 1 FTE for 0 emission transportation specialist to FTE for HCD or housing community development accountants on to assist with some of their covid rental.

assistance accounting, ongoing funding for the Cultural Arts Master Plan implementation. One-time funding for Parks Pavement Rehabilitation and one time funding for Better Arabia Valley of Light artwork expansion. The district attorney has requested 1.5 FTE for post-conviction relief units, a cybercrimes unit investigator and two deputy district attorneys for court backlogs.

There is an asterisk next to the $312,800 for the Deputy District Attorneys for backlog that indicates that it is ARPA eligible and you'll be hearing about that as part of the ARPA discussion. Planning and development has 2 options for consideration. Uh, it was either option 1 or option to the first option entails one time funding for consultant to assist them with a long range planning activity.

And the option two is for four FTE permanent ongoing that includes ongoing costs. The public defender has requested three FTE for the court backlog, again this is an ARPA eligible item and will be discussed as part of that special issue. They've requested a data analyst One position and three conversions of extra help, legal LOPs or Legal Office Professionals to permanent associated with the discovery efforts. These are the two positions that I spoke about in regard to the data and discovery effort there. Public Works has again requested PCI one-time funding at $3.1 million and they have general cost increases of $4.8 million ongoing.

The sheriff has requested seven FTE for co-response expansion, five FTE for narcotics team. One FTE for a human trafficking detective, five FTE for cannabis compliance team, two FTEs for an ORCOT and Montecito community resource deputies, six FTE to for the sheriff's service technicians for the Northern Branch Jail, one accounting supervisor and two service technician investigators The Treasurer Tax Collector has requested three veteran service representatives and one transient occupancy tax compliance position. This totals the 52.5 FTE mentioned. In addition, we have two new requests that were submitted late last week.

One for the County Executive Office for a Waterfront Infrastructure Feasibility Study through REACH for a one-time cost of $100,000. The goal of the study is to determine where and how waterfront and supporting infrastructure can be enhanced or created to enable offshore wind and commercial space on the Central Coast and position the region to capture the jobs and economic benefits associated with them. The study includes Slope County and City of Morro Bay that are contributing towards the study. The second request is from General Services Department for EV infrastructure costs stemming from the board's discussion last week in the Climate Action Plan.

Report your board directed staff to revise the county policy regarding electric vehicle purchases to include light duty vehicles and ultimately expand to all county departments. GS was asked to identify the one time infrastructure costs, facilitate start facilitating this plan. The total projected cost for costs are 1.5 million dollars with 400000 needed for fiscal year 2223.

While one-time funds are limited, staff have also once again identified priority CIP projects for your consideration. These projects will be discussed in detail on Tuesday as part of the Maintenance and Capital Project Special Issue. Clearly, it is evident that the totality of the requests on the previous slides far exceed the funding available for next fiscal year and those forecasted over the next five-year period. As your board deliberates over the next week you may consider options such as direct our staff to work with departments and recommend Reductions to their budgets to fund the requests, evaluate in terms of risk liability cost savings discretionary versus mandatory. Review non-general fund sources if not already evaluated use one time funds for pilots but set clear expectations of end dates and for longer options have our office evaluate other potential revenue measures Many of the key challenges that the county is facing and emerging issues are contributing towards the limited available resources for budget development this year.

Departments are grappling with changes in new state and federal mandates, many of which either decrease revenue or increase workload with minimal financial support. We know that Public Works Road Division continues to be challenged with increasing costs to do business including insurance premiums Costs resulting in the use of one time fund balance to remain at status quo PCI levels. The budget is balanced for fiscal year 22-23, but a policy discussion with your board prior to the next budget cycle will be necessary for long term sustainability. There is much momentum on the criminal justice system improvements and collaboration on initiatives that we know have costs and will likely require future funding consideration. We know that the Sheriff's budget assumes full cost recovery for city contracts next year that is being disputed.

We know we need to plan for future increasing costs for pension and insurance premiums, and we know we have an ongoing homelessness services cost cliff after ARPA funding expires in fiscal year 25-26 Looking forward, we want to be thoughtful when considering federal spending opportunities that will be incorporated into the recommended budget. We want to ensure that we follow established fiscal policies and maintain prudent reserves. And we want to begin thinking about a reset of the county strategic initiatives and the alignment of department goals, objectives and performance measures that is to promote best practices and budget award criteria that is effective for 23-24.

The next step for budget workshop is to hear the department presentations as scheduled along with other special issues this week that include maintenance and capital projects on Tuesday, and digital transformation update and ARPA funding update on Thursday. After the budget workshops, we take any direction from your board and finalize the recommended budget that will be released in late May. The final budget hearings will be held on June 14th and potentially June 15th if needed.

On Thursday after a board deliberation, we will be looking for the board to take action on the following recommendations. We look forward to hearing your priorities this week so that we may complete the recommended budget that best meets your boards expectations. That concludes my comments on the overview. Chair Hartman, I'm happy to answer any questions you may have. The first functional group on the schedule today is Health and Human Services.

Do we have any questions? Supervisor Lavinino. Thank you

Madam Chair. So I don't know if this is maybe a question for you or maybe for... And I guess I can ask it now and when Joe Holland comes up we can kind of touch on it then too. Just on the property tax revenue trend And it was the CEO's slide 11 and then you also talked about it too. And we've just had, which is nice continued steady growth but I mean just anecdotally when I look at housing prices and there's this huge explosion out there a lot of turnover with some very high value properties in Montecito and Santa Barbara. And I'm like, I keep thinking when's that going to show up for us? Like when is that big 7-8% year? And it just seems like we keep hitting the 3.5%, 4%, 4.5%. But it just seems like, Orchid Homes are now selling for a million dollars.

So I'm just curious how, when's that gonna translate or when do we see

Supervisor Labadino through the chair. Thank you for the question we look at that As well for the five-year forecast, and I think that's a great question to pose to the to the assessor they do We do rely on their expertise and in kind of four forecasts helping us forecast in addition to the auditor's office For that We do have the four and a half percent increase. I will say in the out years is It's indicative on the the revenue estimates that there's somewhat of a decline a bit. So I think the intent the expectation is that May not hold to this level so but we are seeing eight million dollars in increase in just current secured So that's that's good. That's that that is significant and certainly helping us offset the increased costs that we're seeing

Supervisor Williams

Well I share Mr. Lavagnino's alarm, I mean you know it I think it would be...I know from the perspective of a budgeting the property taxes is a good thing from the perspective of policymakers trying to impact the increase in property values it is a terrible thing and it's I suppose in some ways Hopeful that we would have small incremental growth rather than large leaps that indicate our housing becoming more and more unaffordable. And our ability, you know the increased revenue that we get not really compensating for the ability to mitigate that growth.

You know I've joked only half Jokingly, meaning half seriously that maybe the public policy question of the future is how to decrease property values. That's not something I would like to see because obviously that creates another disjointment but it's the increase in property values are increasingly pushing changing our demographics. You saw in my district for the first time, the west side is not majority Latino So where the property values are pushing out Latino members of the community like they pushed out, like previously a large part of the African American community was pushed out of Santa Barbara. And of course anybody who's young is not spared either.

Young families paying a disproportionate share of that increased value. But my question is just that tomorrow in the infrastructure, I understand why some of our infrastructure hopes fell off staff recommendation with the scale of need proposed by all these departments. You know, I have no criticism for it but the million dollars of HVAC that fell off the staff recommendation, I would just like to have that Detailed because one of the things that we were trying to move towards is when we have one time money's trying to spend some of it on things that reduce our ongoing expenses. And so it would be useful if it's possible tomorrow to have that broken down by The payback period for each one of those projects so that we could understand okay.

Hey, one of these projects has a 10-year payback period Maybe that's a better thing to put some money towards That because you know it will reduce our ongoing expenses

And supervisor we are going to break those down that number to prepare and show with the CIP presentation I know Director Pell is in the audience and she's taking notes Thank You

Supervisor Hart

I look forward to the more detail from DSS and BWELL about the additional positions that they're been able to create using state funding and efficiencies. One thing I was curious about is can you tell me more about this new proposed disaster recovery fund balance? So, that's $3 million that'd be allocated. Is there funding set aside for this purpose already or is this the first investment in

Supervisor Hart for the chair. Thank you for that clarification. Yes, so there is sufficient funds already available. What we found was a really isn't something has been approved by the board to date that really clearly identifies what the intention of portion of that remaining balances for. So we wanted to really clearly identify. That if it's for disaster recovery, when that can be utilized. So there is a balance there. We don't need to set aside any more towards it. We just wanted to really clarify the intention of what the remaining balance would be for.