FY 2024-2025 Recommended Budget Analysis

5/29/2024

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The Big Picture

How much money is there?

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All graphics and exhibits from county materials unless otherwise noted:

• Citizens’ Guide to the Budget
• Recommended Budget

Putting $9.5 billion into perspective:

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• Global revenue of companies like the Saudi National Bank, lululemon athletica, JetBlue Airways, Hertz Rental Cars

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• The annual profits of Costco, Tesla, or Qualcomm

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• The estimated GDP of the country of Yemen

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• The 2019-20 budget for the state of Nebraska

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Only 4% of Dedicated Revenue goes to Public Protection

The biggest bucket: Dedicated Revenues

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28% of Other General Fund Revenue goes to Public Protection

The second biggest bucket: Other General Funds

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51% of General Purpose Revenue goes to Public Protection

The discretionary bucket: General Purpose Revenue

How is the budget shaped?

A simplified description of the process:

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• The Base Budget is built by looking at funding levels from the prior year, especially Net County Cost
• County asks departments to assume 0% growth in NCC and make reductions to meet that limit
• Departments then submit “Augmentations” to restore services that would be cut by the NCC limit and to expand to new services
• The “Augmentation” budget represents how the county intends to spend its new NCC revenue this year

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First chart not from county shows even greater % to “Public Protection”

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Budget Augmentation Requests

• “Technical Augmentations” are rolled into base budget
• Augmentations to “Restore Level of Service” and “Expand Level of Service” are shown in a separate PDF
• “Restore” augmentations =provide same services as before but department couldn’t fit them into same base NCC budget as before

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Augmentations to restore and expand tell us where the county is prioritizing new county spending

71% of Restore and Expand Augmentations are for Public Protection

• And of the Public Protection augmentations, 63% - $64.5 million – are for the sheriff.

Look how the dark blue (Public Protection) slice grows from the total budget (far left) to the discretionary budget (far right)

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Clear priorities in the augmentation budget

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With $144M to decide how to allocate, the county is stating its priorities clearest in what it chooses to expand and restore funding to

Let’s step into the spin zone

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At least 3 aspects of spin

1. We *have to* spend all this money on the sheriff – it’s a mandate!
2. Woe is us – we don’t have much $$.
3. The budget is shrinking!

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Spin 1: It’s a mandate!

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The Mandate

Details of the mandated spending

• 100% of the Sheriff’s budget is mandated, but no details on the mandate are provided
• If 100% is mandated, did they not meet their obligations last year when the budget was smaller?
• Only the Office of Independent Review (100% non-mandated) and $1.2M from the County Executive office are considered “non-mandatory”

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But what’s the mandate?

For comparison, LA County Budget at least says:

• what government code provides the mandate
• that each program in the sheriff’s department is a “mandated program with discretionary service level”

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Spin 2: Who’s rich? Not us!

Actual graphic from the OC FY24-25 Citizens’ Budget Guide

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Total discretionary revenue is over a billion dollars! ��More than $360 per county resident

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Spin 3: The budget is down!

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Spin 3: The budget is down!

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Spin 3: The budget is down!

Last year’s Adopted Budget was $9.3 billion so the Recommended Budget is ~$200 million more.

• It’s just less than the Modified Budget. The Modified Budget adds in funds later in the year that the county isn’t initially 100% sure will come in. By design the Modified Budget is usually if not always higher than the initially Adopted Budget .

Questions?

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Funding Social Control

More to Know on the Sheriff’s Budget

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Not the total! It’s the total in this fund “060.”

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The Sheriff’s Office also controls these other “budget units” which add $167.5 million to the department’s budget.

= extra $53 per resident

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The Health Care Agency is spending $128M for Correctional Health Services in the jail the Sheriff runs

Health care that isn’t

• The County is recommending spending just $99M of its own funding on the Health Care Agency
• Of that, $85M is on Correctional Health, or 85% of all county discretionary spending on the Health Care Agency
• $25 for every resident of county money is spent on correctional health

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About that General Purpose Spending

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This should be 8% (9% is for the jail)

This should be 60%, including the 9% for health care in the jail

And don’t forget about the augmentations!

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The CEO has recommended an additional $64.5 million in “restore” and “expand” augmentations for the sheriff’s department ($20.50 per resident).

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Brings the total sheriff’s budget to $1.24 billion + $128 million in jail health care costs

Sheriff’s final FY23-24 budget was $965,689,742�By March 31, they’d been awarded an additional $3.7M

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And they are projected to gain an additional $30.6M by the end of the Fiscal Year. Each month their budget expanded by an average of $2.85M

Sheriff’s augmentations or overspending could buy a lot of housing

• Sheriff restore and expand augmentations for 1 year

= $64.5 million = 129 new supportive housing units

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• Sheriff projected overspending (which is probably an underestimate!)

= $34.3 million = 68 new supportive housing units

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Estimated cost of building one supportive housing unit in OC ~$500k

Just 1 year of controlling Sheriff costs alone could create at least 200 new permanent supportive housing units in OC!

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One augmentation alone the Sheriff is recommended to receive is $15.9 million for a new helicopter! ��

• 32 supportive housing units
• 1.5% of all budget augmentations
• $4.80 for every person in OC

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We’ll return to the chopper in the next section.

What does this spending get us?

Eve Garrow

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How is Orange County Addressing the Housing Crisis?

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Answer: Not by spending its own money

The Community Resources program covers a lot of ground, but housing and homelessness services are in here:

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• Orange County Housing Authority (OCHA) ($315.9M, up $19.7M)
• OC Housing ($18.3M, down $20.9M)
• CalHome Program Reuse ($20,000)
• Strategic Priority Affordable Housing ($205,000)
• MHSA Housing Fund ($4.9M, down $9.5M)

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$350.7M in spending, mostly from state and federal dollars and programs, only $1.1M is Net County Cost

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$1.3B in spending on the sheriff and the jail, with just $351M on housing

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$1 million of NCC to housing, but $324M to the sheriff and jail

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Per resident, over $400 to the sheriff and jails, and only $111 to housing

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Amount per Resident

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Per resident, over $100 in NCC spending to the sheriff and jails, and only $0.34 to housing

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Amount per Resident

Fiscal Responsibility and Budgeting

Systems of Control

• Take discretionary revenue and spend it on things that incur future costs
• Generate employment for county employees
• Do not address root causes
• Do not generate revenue or future savings

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Systems of Care

• Take discretionary revenue and invest it in revenue and savings generating solutions
• Generate services and supports to people in need
• Address root causes
• Help people get well and generate ongoing savings

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In other words

Costs millions to operate and maintain

Saves millions of dollars a year

• Estimated in 2017 that permanent supportive housing for all people experiencing chronic homelessness would save the county $42M annually
• In 10 years, that would generate nearly $500M in savings, paying back the initial investment

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This Photo by Unknown Author is licensed under CC BY-SA-NC

https://www.unitedwayoc.org/wp-content/uploads/2017/08/united-way-cost-study-homelessness-2017-report.pdf

History Trend Slide

Coming soon

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Other Community Services

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Funding capital projects like:

• $140M expansion of the Juvenile Corrections Campus
• $86.3M for a new Workforce Reentry location
• $10M for a new arraignment court room

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In total, $102M in spending (down from $214M), primarily on “Other Financing Uses” which is largely funding capital projects listed above

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Does it though?��Why is justice first?

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How is a correctional facility prevention or intervention?

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CARE Court Program

Additions in FY 24-25

• Add $1.2M and 6 positions in Public Defender Office

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Maintain FY 23-24 additions to staff and fund CARE Court

• $3.9M in Health Care Agency (11 positions)
• $1.5M in Public Defender (8 positions)
• $290k and 2 positions in Health Care Agency – Public Guardian

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Total: $6.9M

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Immigration services mentions are few

• The Public Defender requested one position, funded by the county, to provide Immigration Support Services (~$280,000)
• Board of Supervisors 2^nd District mentioned public events
• The Transparent Review of Unjust Transfers and Holds (TRUTH Act) community forum
• Medi-Cal Enrollment event for those newly eligible under state law for Medi-Cal expansion
• The Sheriff’s State Criminal Alien Assistance Program (SCAAP) receives federal assistance for incarcerating undocumented people held in Orange County jails ($5.4M)

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Other Community Services of Note

• Social Services Agency
• Mental Health Services Act ($327M, down $54.9M)
• OC Opioid Settlement Fund ($9.1M, down $0.6M)
• OC Tobacco Settlement Fund ($51.2M, down $2.2M)
• Health Services Agency ($1.13B, down $45.6M)
• Correctional health is $128.8M of this budget unit (11.4% of health services spending is at detention facilities)
• County Executive Office
• OC Cares Fund ($102.0M) (funds 3 “data analytics unit” positions)
• Office of Care Coordination with 25 FTE, reorganized from the Health Care Agency (up $50.7M)

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Questions?

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