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Long-Range Financial & Service Forecast FY 2011-12 thru FY 2015-16. Overview. Financial Forecast FY 2010-11 Estimates FY 2012 -16 Forecast Outstanding Strategic Issues Employee Compensation Employee Healthcare Unfunded Federal and State Mandates Increased demand for services

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Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Long-Range

Financial & Service Forecast

FY 2011-12 thru FY 2015-16


Overview
Overview

  • Financial Forecast

    • FY 2010-11 Estimates

    • FY 2012 -16 Forecast

  • Outstanding Strategic Issues

    • Employee Compensation

    • Employee Healthcare

    • Unfunded Federal and State Mandates

    • Increased demand for services

  • Recommendations


Background

In the Fall of 2008, first impacts of the Global Financial Crisis began to be felt in Bexar County

Commissioners Court adopted Expenditure Balancing Strategy:

FY 2008-09: Directed mid-year 3-5 % expenditure reductions

FY 2009-10: Additional budget reductions of 3-5%

FY 2010-11: Maintain FY 2009-10 department budget levels

Background


Background1

Targeted Hiring Freeze Crisis began to be felt in Bexar County

No salary increases (other than CBA)

No across the board salary cuts, furloughs, etc.

In December 2010, one-time, non-recurring $500 salary adjustment awarded to employees

Background


General fund background

Before corrective actions were taken the General Fund Operating Budget was $341,076,864

FY 2010-11 General Fund Operating Budget is $327,961,935

General Fund Savings is $13,114,929 from cost savings strategies, this represents a 4% reduction in operating expenses from FY 2008-09

General Fund Background


One time revenues

Even with these measures, one time money used for last two years:

In FY 2009-10: $6 million in one-time revenue was used to fund recurring expenditures

In FY 2010-11 Budget identified an additional

$2 million in recurring revenues to offset the

previous year one-time revenues

Therefore, $4 million of the revenue is still one-time, causing the County to draw down on Fund Balance to provide a balanced Budget.

One-time Revenues


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Fall 2010 Forecast years:

  • Adopted Budget projections assumed 1.5% increase

  • in Ad Valorem revenue for FY 2011-12

  • Also assumed a 3% increase in subsequent years

Funds Available

Funds Needed



Revised forecast assumptions
Revised Forecast Assumptions years:

Based on preliminary tax rolls, ad valorem

revenues for FY 2011-12 are less than the Fall

Projection

Result: this forecast lowers projected property tax

revenue growth from previous forecasts:

CurrentPrevious

(1.6%) in FY 2011-12 1.5%

1% in FY 2012-13 3%

2% in FY 2013-14 3%

3% through FY 2016. 3%

9


Long range forecast
Long Range Forecast years:

Funds Available

Funds Needed


Budget needs

Based on the current forecast adjusted for the loss in ad valorem, the County needs to:

Identify an additional $2 million to maintain a balanced baseline budget over the forecast period

Will NOT address Strategic Issues (following slide)

Budget Needs


Baseline lrff w 2m before addressing strategic issues
Baseline LRFF w $2M valorem, the County needs to:Before Addressing Strategic Issues

12


Strategic issues cost not included in forecast

Employee compensation programs (including New Collective Bargaining Contract)

Healthcare Costs

Unfunded Federal & State Mandates/Budget cuts

Increasing demand for County Services due to Population Growth

All are not included in the previous projections

Strategic IssuesCost not included in forecast


Employee compensation
Employee Compensation Bargaining Contract)

  • Over the last ten years, the County has provided competitive wages for our employees through various compensation programs

    • Regularly scheduled Pay table studies

    • 6 month pay increase

    • Hiring and promoting above minimum

    • Progressive pay model

    • Merit Award programs

    • Cost of living increases


Employee compensation1
Employee Compensation Bargaining Contract)

  • This program has largely succeeded in keeping Bexar County competitive with the market

  • However, given the revised lower forecast growth rates in real estate, employee compensation will not be able to grow as fast as in the past

15


Employee compensation2
Employee Compensation Bargaining Contract)

  • 74% of County Operating Revenue is provided by property taxes

  • Employee salaries and benefits account for 71% of County Operating Expenses

  • 1% salary increase for all County employees =$1,834,713, about equal to one percent growth in property tax revenue

16


Employee compensation3
Employee Compensation Bargaining Contract)

As part of Commissioners Court Expenditure Balancing Strategy there were no across the board salary increases during the past three years.

Going forward, the County will need to identify ways to fund Cost of Living Adjustments to keep up with future inflation growth and maintain market competiveness with other employers

17


Collective bargaining
Collective Bargaining Bargaining Contract)

County entered into collective bargaining agreement with Deputy Sheriffs Association of Bexar County in Aug 2006

Contract expired in Sep 2009 – currently in “evergreen” status

Negotiations for new contract started Apr 2009 - no final agreement yet

18


Collective bargaining1
Collective Bargaining Bargaining Contract)

  • $531,729 budgeted in FY 2010-11 for Deputy Sheriff “step” increases required by the collective bargaining agreement

  • Bargaining unit members pay FY 2006-07 health insurance premium rates, per the collective bargaining agreement

    • For FY 2010-11, this benefit is estimated at $882,795


Medical plan funding
Medical Plan Funding Bargaining Contract)

* This is the amount in additional funding (or savings from plan design) that is needed to ensure sustainability of the Medical Plan


Contributions expenditures
Contributions/Expenditures Bargaining Contract)


Medical inflation trends
Medical Inflation Trends Bargaining Contract)

  • Medical inflation trends are expected to be 10% per year over the forecast period

    • Segal Company: 10.6%source: 2011 Segal Health Plan Cost Trend Survey

    • Mercer: 10% source: Wall Street Journal, “What’s Happening to Your Health Plan?”, 10/9/2010

    • Bureau of National Affairs: 8.4% - 12.7%source: “Surveys Predict Health Care Costs Will Rise 8.2 to 12.7% in 2011,” Managing Benefits Plans, Issue 13-2, February 2011


Medical claims cost pyramid
Medical Claims Cost Pyramid Bargaining Contract)

Claims Group (total 2010 claims)


Five year forecast
Five Year Forecast Bargaining Contract)


Medical plan options
Medical Plan Options Bargaining Contract)

  • County and employees pay more for same coverage

  • Reduce benefits to match current contributions

  • Decrease costs through healthy lifestyle, preventive care, plan incentives


Unfunded mandates

Expect decline in State and Federal funding Bargaining Contract)

Unfunded mandates are a growing concern

State is considering cutting mental health beds, which will impact jail population

Other issues such as voter identification, immigration, and appraisal caps are anticipated

Medical Reform

Unfunded Mandates


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Long Range Service Forecast Bargaining Contract)


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Long Range Service Forecast Bargaining Contract)

  • Planning tool for use in preparing for

  • increased service demand as a result of:

    • Increases in overall Bexar County population

    • Increased population in unincorporated area

    • A more urban-like and developed unincorporated area


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Drives Demand for Services Bargaining Contract)

  • Some services are driven by the

  • unincorporated area population

    • County Roads, Fire Marshal, etc.

  • Others are driven by demographic

  • factors, such as age

    • Citizens 18 and over drive the demand for Elections, Adult Criminal Justice, etc.

    • Population 17 and under drives the demand for Juvenile Services


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Forecast Methodology Bargaining Contract)

  • Analyzed recent trends in the population

  • of Bexar County based on US Census

  • data

  • Utilized historical information and what is

  • known already about the future to project

  • future population

  • Results provide the drivers for County

  • services


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Trends Bargaining Contract)

  • Overall Population

    • Bexar County’s population increased by

  • 23.1 percent from 2000 through 2010

    • Increase of around 320,000 citizens

    • Annual increase of 2.1 percent, higher

    • than the annual increase over the past

    • four decades


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Trends Bargaining Contract)

  • Unincorporated Area Population –

  • “Balance of Bexar”

    • Unincorporated area population

    • increased by 79 percent from 2000

    • through 2010

    • Increase of around 110,000 citizens

    • Annual increase of 6 percent


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Trends Bargaining Contract)

  • Population in the unincorporated area now

  • makes up a greater percentage of the total

  • population


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Trends Bargaining Contract)

  • 34.3 percent of the increase in the total

  • population occurred in the unincorporated

  • area


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Trends Bargaining Contract)

  • 82 percent increase in the number of

  • housing units in the unincorporated area

  • from 2000 to 2010

46,770 in 2000

85,452 in 2010


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Population Trends Bargaining Contract)

  • Bexar County’s population has gotten older

Most County services are delivered to those 18

and older


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Overall Population Projection Bargaining Contract)

  • Used annual growth rate in the 2000s to

  • project the growth through 2017 using

  • 2010 population as the baseline


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Overall Population Projection Bargaining Contract)

  • Bexar County’s population projected to

  • increase by 13.3 percent through 2017

  • Increase of 268,000 citizens

  • Estimated Bexar County population in

  • 2017 of 1.9 million citizens


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Unincorporated Area Projection Bargaining Contract)

  • Used “Balance of Bexar” figures from US

  • Census 2010 as baseline

  • Projected growth rate of about 4.9 percent


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Unincorporated Area Projection Bargaining Contract)

  • Bexar County’s unincorporated area

  • population projected to increase by

  • 33.9 percent through 2017

  • Increase of 102,000 citizens

  • Estimated unincorporated area population

  • in 2017 of 352,000 citizens

  • Estimate 5,000 plats each year


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Age Group Projections Bargaining Contract)

  • Utilized 2010 Census numbers as baseline

  • Applied percentages by age group utilized

  • in projections prepared by the State

  • Demographer

  • Bexar County population will continue to

  • get older


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Age Group Projections Bargaining Contract)

  • Bexar County’s population will continue to

  • get older


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Service Forecast Bargaining Contract)

  • Population growth impacts the level of

  • demand for Bexar County services

  • Given limited resources, the County needs

  • to plan so that it can effectively

  • deal with the challenge of providing more

  • and potentially different services

  • First step is to forecast what the

  • demand will be – Service Forecast


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Service Forecast Methodology Bargaining Contract)

  • Identified service driver (population

  • segment) for each core mission

  • Utilized projected population segment to

  • forecast workload demand for each core

  • mission

  • Allocated staff to core missions

    • Separated out administrative and support staff

  • Projected costs/staffing based on future

  • workload demand


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Service Forecast Cost Bargaining Contract)

  • Six Service Areas and unadjusted 5-year impact:

    • Adult Criminal Justice Services $11.1M

    • Juvenile Criminal Justice Services $2.2M

    • External Government Services $2.1M

    • Roads and Capital Program $3.2M

    • Social Services $252K**

    • Internal Government Services $502K

    • **Does not factor in losses of Federal or State Funding


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Service Forecast Results Bargaining Contract)

  • Summary

    • If cost-effective service delivery methods aren’t identified, the cost of serving our growing County population could be $19.2 million over the next five years.


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Service Forecast Results Bargaining Contract)

47


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

Service Forecast Results Bargaining Contract)

  • County will need change our way of

  • delivering services:

    • E-gov, technology, automation

    • More efficient business processes

    • More cost-effective staffing models

    • Proactive service delivery planning program

    • Focus on Core Service Delivery

    • The “New Normal”

48


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

LRFF Recommendations Bargaining Contract)


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

FY 2010-11 Bargaining Contract)

  • Commissioners Court direct PRM

  • to identify:

    • Additional $1 million in recurring mid-year

      savings/revenue enhancements ($2 million

      when annualized) for Commissioners Court

      consideration to address base budget imbalance

    • Target recommendations to Commissioners

      • Court in May 2011


Fy 2011 12 budget
FY 2011-12 Budget Bargaining Contract)

Commissioners Court direct PRM to:

  • Develop FY 2011-12 Proposed Budget to

    recommend an additional $5-10 million in

    savings or revenue enhancements

  • 1.5 - 3% of GF $327 million Operating Budget

    This will require hard choices


Fy 2011 12 budget1
FY 2011-12 Budget Bargaining Contract)

Direct staff to:

  • PRM: Identify Changes to employee Medical plan for next Plan Year (January 2012)

    • Plan design changes (covered benefits, co-pays, deductibles, out-of-pocket maximums)

    • Healthy lifestyle / healthy outcome incentives

  • Target is to reduce annual County cost growth to 3% ($2 million cost avoidance/savings per year)

52


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

5 Year Plan for Service Delivery Bargaining Contract)

Direct staff to:

  • PRM: Work with each office and department to

    develop 5-year Service Delivery Plans. Presentation date to Court in Summer 2012

  • BCIT/PRM: Work with Offices and departments to

    identify and prioritize I.T. projects that generate

    highest return on investment.

    Goal should be $5 million identified in annual R.O.I. savings by FY 2012-13.

53


Long range financial service forecast fy 2011 12 thru fy 2015 16 1347029

5 Year Plan for Service Delivery Bargaining Contract)

Direct staff to:

  • All Offices and Departments: Identify

  • improvements in current business practices

    Goal of this 5 year plan is to allow the County to deliver services to our growing population while still being able to compensate our employees as cost of living and inflation increases


Adjusted forecast
Adjusted Forecast Bargaining Contract)