Santa Barbara County Grand Jury • 2013-2014 • Agency Response
Response to: BOS-2015

Steve Lavagnino Fifth District, Chair Board of Supervisors Janet Wolf Second District, Vice Chair County Administration*

Published: August 26, 2014 8 pages
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Findings and Recommendations 4 findings

F2
The County Fire Department is allocated 25 percent of property tax increases; for property tax increases of 3.5 percent, the current plan allocates 28 percent of property tax increases for NBJ, leaving the County with 47 percent of property tax increases for all other departments. Response: The Board of Supervisors disagrees partially with the finding. The Fire Department will receive 25 percent of property tax increases as established by County ordinance, but the Fire transfer amounts have been removed from the projections before calculating the property tax growth. Based on the response in
Related Recommendations (2)
R2A
That the County show both the annual property tax increases values and percentage increase over prior year on the County website and distribute to news media in a format similar to Table 3 below. PTI Property County Plan Funding Ratio of Ratio of Reserve Year's Available Tax Property Fund FD Allot NBJ Allot Increase Percentage Contribution FYE to All Tax Increase Over Prior Balance to Total to Total Increase to NBJ ($M) Other (PTI) Revenue Year ($M) ($M) PTI PTI Depts ($M) ($M) 0% 1.0 1.0 1.0 1.40% 42% 58% 2012 174.4 2.4 1.0 2.0 0.0 338% 57% - 296% 2013 176.2 1.00% 1.7 3.3 3.3 18% 57% 1.3 2014 183.4 4.10% 25% 7.2 4.6 7.9 1.3 2015 190.2 6.9 3.74% 25% 19% 56% 1.5 13.7 30% 6.1 2016 195.2 5.0 2.61% 25% 45% 1.5 7.6 18.6 2017 205.0 9.8 5.04% 25% 15% 60% 17.2 1.5 9.1 2018 210.0 2.40% 25% 30% 45% 4.9 1.8 10.9 10.8 2019 212.2 1.06% 25% 81% -6% 2.2 12.7 5.6 2020 226.9 6.92% 25% 12% 63% 1.8 14.7 2.2 14.9 2.1 2021 5.99% 16% 59% 240.5 13.6 25% 0.2 21% 2.2 17.1 2022 251.1 4.42% 25% 54% 10.6 0.0 2.2 19.3 2023 22% 53% 261.3 10.2 4.06% 25% Table 3. Displays property tax increases and allocation. Data for 2014 are estimated; data is hypothetical for 2015 and later and are not intended to be predictions but are intended for format only. Response: The recommendation to display the growth in Property Taxes has been implemented. The format is not identical to the suggested recommendation, but the information is available in the FY 2014-15 Budget Book. The Budget Book is displayed on our website and communicated to the media. The FY 2014-15 Budget Book displays a breakdown of current and projected property taxes including the percentage of year over year growth (page B-21); this information is associated with columns 1-4 of the table above. As previously stated, the Fire tax shift revenues are excluded from the County revenue figures above, so columns 5-7 would not be applicable to this table. Additionally, the Fire Tax Shift amounts are part of the overall property tax calculation and are not identifiable in the County's Financial Information Network (FIN). The requested information on the right-hand side of the above table (columns 8- 10) represent the incremental funding progression of the jail funding plan and is currently displayed in the Budget Book on page B-29. As mentioned in the response to Finding 3, appropriations are made countywide during the budget process and are taken into consideration as an entire budget. Property Tax is a component of available funding sources, and is not directly allocated to single items. Nevertheless, the incremental amount being allocated to the jail in relation to the rest of the County is depicted in the Budget Book on page B-22. Grand Jury Response Letter August 26, 2014
R2B
That the County prominently display a graph similar to Figure 5 below, on the County website and distribute to news media that contains the annual percentages of property tax increases allocated to Public Safety (Probation, Fire and Sheriff's Office), (2) Northern Branch Jail, and (3) all other departments. PTI Allocation: NBJ, Fire, and All Other Departments 120% 100% PTI Allocation by Percentage 45% 80% 29% 29% 60% 40% 31% 20% 30% %6 0% -20% 2959 -40% 2013 2014 2015 2017 2018 2019 2016 2020 2021 2022 2012 _ NBJ ☐ Fire All Other Departments Figure 5. Example displaying percentage of PTI allocated to Northern Branch Jail, Fire and All Other Departments. Data for 2014 are estimated; data are hypothetical for 2015 and later and are not intended to be predictions but are intended for format only. Response: The recommendation to display property tax increases allocated to Public Safety, the NBJ and all other entities will not be implemented because it is not warranted. As already established, revenue associated with the Fire Tax Shift is not separately reported, and is netted out of revenues. The request to show funds associated with the Northern Branch Jail is already disclosed (Budget Book, page B-22). This schedules shows anticipated expenditure growth by type. Finally, the request to demonstrate changes in General Fund Contributions between Safety and other Functional Groups is already disclosed in the Budget Book, on page C-34. This schedule displays three years of General Fund Contributions by Department and Functional Group. Grand Jury Response Letter August 26, 2014
F3
The public may not be informed concerning the potential impact that Northern Branch Jail operating cost may have on staffing and services provided by other departments. Response: The Board of Supervisors disagrees partially with the finding that the public is not informed of the potential impact of the NBJ funding on County staffing and services. The County's General Fund Allocations to departments in FY 2014-15 increased so direct reductions as a result of funding the NBJ have not been necessary. The NBJ has and continues to be reviewed and discussed at length by the Board of Supervisors in public meetings. The required funding for the Jail Operations Fund was identified in the FY 2014-15 Budget Book (pages: B28-29), during budget workshops, and in the Fiscal Outlook Report presented last fall.
Related Recommendations (1)
R3
That the Board of Supervisors communicate with their constituents, at least annually, concerning staffing and service cuts, revenue enhancements, or other options that may be necessary to fund Northern Branch Jail operating cost. The need to report actual staffing, service cuts and revenue enhancements to fund Response: the NBJ has been implemented. This is part of the normal budget process and public meetings. Items such as jail operations funding, maintenance funding needs, salary and benefit issues, revenue enhancements and overall projections are presented to the Board and public several times during the year. These updates include the Fiscal Outlook Report, Budget Workshops (including Service Level Reductions) and Budget Hearings. In prior budgets, we have displayed projected future out of balance conditions (when they appear probable) which may require departmental service level reductions. In these instances we did not attempt to indicate potential future cuts do to the uncertainty but would present them as they became known. Regarding service reductions, recent property tax assessed values have exceeded projections and are expected to result in surplus revenues in FY 2014-15; thus, service level reductions due to lack of general revenues are not anticipated. If budget reductions were necessary, they would be communicated in the normal budget process, specifically within the Service Level Reduction statements in the spring. Proposed revenue enhancements are a matter of public record and are regularly reported to the Board and Public through the Quarterly Budget and Financial Reviews.
F4
The Office of the County Assessor appears not to have the expertise to take full advantage of the potential for additional property tax revenue based on higher assessments of specialized industries such as oil and gas, wineries, and upscale hotels. Response: The Board of Supervisors agrees with the finding. The County Assessor has also responded directly to the Grand Jury (Attachment B). In the Assessor's response, a need for 3 additional assessors and 1 GIS position were indicated. During the June 2014 Budget Hearings, the following positions were requested by the County Assessor in order of priority: a) 1:5 Administrative Office Professionals in the Elections Division b) 1.0 property appraiser, Assessor Division c) 1.0 GIS analyst were requested, Assessor Division d) $100,000 for oil & gas litigation support, Assessor Division While no appraisers were added in the FY 2014-15 Recommended Budget, 1 appraiser was added in FY 2013-14 and $600,000 of additional ongoing General Fund Contribution was added to the Assessor Division's budget to assist in funding their ongoing needs. Additionally, $380,000 of one-time funding was available to the Department but was not needed based on salary savings from vacant positions. These vacancies have now been filled and assessment expertise is being developed; however additional funding and staffing may be necessary in future periods. The number of appraisers and assessment supervisors is down from pre-recession levels but has been growing in the past few years. Now that the Assessor's vacancies have been filled, a better assessment of the remaining needs can be completed during the upcoming budget cycle. Grand Jury Response Letter August 26, 2014
Related Recommendations (1)
R4
That the Board of Supervisors collaborate with the County Assessor to assure the Office of the County Assessor has adequate capacity and expertise to optimize property tax receipts from specialized industries. The recommendation that the Board of Supervisors collaborate with the County Response: Assessor has been implemented. The County Assessor has the opportunity every quarter to discuss with the County Executive the needs of the department and to make requests directly to the Board of Supervisors within the annual Budget process. Recently, the Assessor has filled a significant number of vacancies and expertise is being developed within the department. The County Assessor has also responded directly to the Grand Jury (Attachment B). Grand Jury Response Letter August 26, 2014
F5
The Santa Barbara County Jail Northern Branch Fiscal Analysis, Facts & Figures published in November 2008 is outdated. Response: The Board of Supervisors agrees with the finding. The comprehensive published report is outdated as it was a one-time report that was not continually produced. However, many of the facts and figures have been updated and communicated in different formats including public meetings, budget discussions and in published documents such as the Budget Book. See responses in Recommendations #2 and #5 for recent updates of information previously included in this 2008 report.
Related Recommendations (1)
R5
That the Board of Supervisors update and publish the referenced report to revisit options that could mitigate any shortfall in operating cost if and when that shortfall becomes apparent. Response: The Recommendation to update the 2008 NBJ Fiscal Analysis has not yet been implemented, but will be implemented in the future. Below is a brief summary of the Operating Funding Options identified in the 2008 report and a brief status update. The level of detail in such an update will be evaluated and appropriately included in the FY 2015-16 Budget Decision Funding Option Update Countywide Proportional Cuts to fund Jail This option was to immediately create necessary funding. The current General Fund were considered and identified funding plan calls for incremental funding over several years which does Reductions of in 2008 but not implemented as not require reductions to existing Dept. funding. approx. 7% revenue growth appeared to be Additionally, in the 2008 report, the 5 year forecast projected adequate. Discretionary GF deficit of $47M. In 2014, the 5 year forecast projects a $12.0M surplus. Redirect Prop Use is per BOS Direction After construction, Prop 172 funds are available for ongoing funding. The 172 Sheriff has committed Prop 172 growth to partially fund the County's match for the new jail construction costs. An element of the Fire District tax shift was to redirect Fire's portion of Prop 172 ($3.2M) to the other Safety Departments. These funds could be directed to the Jail Operations Fund at the Board of Supervisors direction. This would account for about 22% of the remaining ongoing funding required. Diversion of Being used Revenue Projections are continually being updated and monitored in the Revenue Growth Fiscal Outlook Reports and the Budget process. Oil Development Potential Countywide Revenue BOS policy decision on new revenue; was recently proposed but not Enhancement supported. Parcel Tax Requires Voter Approval Not a recent ballot measure Utility User's Requires Voter Approval Not a recent ballot measure Tax Sales Tax Requires Voter Approval Went to public vote and was rejected TOT Requires Voter Approval, BOS considering as a potential Countywide Revenue Enhancement; a Potential Countywide Revenue proposed increase from 10% to 12.5% will be on the ballot in November Enhancement 2014. Economic Potential Countywide Revenue Continually considered by BOS Development Enhancement Benefit Not allowable for Public Safety Not allowable for Public Safety Assessment Purposes District Sincerely, Steve Lavagnine, Chair County of Santa Barbara Board of Supervisors Santa Barbara County Board of Supervisors cc: Ted Sten, Foreman, 2013-14 Santa Barbara Civil Grand Jury

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.