COMMITTEE ON BUDGET AND APPROPRIATIONS

MINUTES

MAY 13, 1996

ATTENDANCE:

B& A MEMBERS: Wishnie, Delfino, Young, LaMotte, Darcy, Abinanti

OTHERS: C.E.’s Office: Gina Angiulo, Jamie Hastings; Budget Dept.: Joe Phelan, Leslie Bennett, Tom Coleman; CBAC: George Hosey, Barbara Strauss; Legislator Stewart-Cousins, Carsky; LWV: Jo Brill; BOL: Robert J. Boland, Glenn Guzi, Don Sandford, Dan Rodriguez, Tina Seckerson

Co-Chair Wishnie called the meeting to order at 3:12 p.m.

DISCUSSION: (There is a cassette tape on file for more detailed information):

• Mr. Wishnie opened the meeting by stating that the quarterly projections are utilized as a tool by the County to provide for a safety net to make sure that by the end of the year there aren’t any difficulties that have not been identified.
• Mr. Phelan began by stating that with regard to quarterly projections, the numbers are less important than the major trends being seen. The quarterly projections are used as a management report rather than an economic indicator. They help to highlight quickly and early on in the year potential shortfalls so that there is sufficient time to correct those problems. It is premature to come down with a list of cuts that may or may not happen depending on state cuts.
• Major assumptions in the 1st quarter projections: no major state budget cuts are included and the Medical Center contributions do not include state aid cuts.
• With regard to Education and Transportation, we are projecting a 50% return against the expenditures rather than an optimistic 59% (which we are entitled to, but on a practical basis very rarely get). Reduced $2 to $3 million worth of revenue recovery in this projection as a hedge against what is currently known about the status of the state budget.
• Projected no increase or decrease in sponsor contribution to WCMC. Budget has met with Commissioner Stolzenberg regarding the status of his budget and he has indicated that there will be need to increase sponsor contribution. The numbers the press has reported concerning a potential $20 million shortfall is typical for hospitals all over the state, not only WCMC. The $20 million is not all applicable to 1996 because it would not be effective January 1, 1996. It will be effective much later on in the year, perhaps August or September so therefore the full impact of any cut will not hit up against the 1996 budget. It will be spread over at least two fiscal years. However, there is a potential for a grave shortfall of state aid reimbursement to WCMC. The Commissioner has chosen not to produce that negative variance in his forecast at this point in time because of all of the negative reaction which would not help the situation as it stands right now. His colleagues in the downstate medical associations that he is working with take that same view. Right now they are working behind the scenes rather than making public statements.

COMMITTEE ON BUDGET & APPROPRIATIONS

MINUTES - MAY 13, 1996

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• Overall vacancy status is at about the same place as last year. 516 total all funds vacancies (General fund: 238; WCMC/RTI: 250; Districts: 28). Although the vacancy counts are about the same as last year, when the 1996 budget was adopted we downsized, rightsized and early retired 812 positions out of the budget, including a majority of those vacant positions last year.
• Sales tax projections and collections are on budget. In the winter of 1994 the County was $2-$3 million below its sales tax budget for the first half of the year. We did not catch up the $2 million cash shortfall until mid-August of 1994. Right now we are on budget on an account of some $191 million. That is a monumental revenue for the County and it appears to be stable at this time. We have collections of revenues that were not budgeted in 1996; additional "windfalls" such as Corrections State Ready Lawsuit.
• Projecting a balanced budget for 1996 at this time with all of the conservative assumptions that have been put into it.
• OPS is benefiting this year. Dept. of Correction overtime is not a problem as it was last year.
• The largest area of savings in the expense budget appears to be a $10 million, absent any adjustments from the state, in Relief Accounts. However, this reduced expense creates a $12.4 million shortfall for state aid for social service spending. DSS net is positive $720,000.
• The area of greatest concern is the $5.8 million shortfall in the category expenditures in education-transportation program. The budget called for $40 million worth of expense for 1996 and now projecting an expenditure of $46 million. Will be working with the Department of Health to go through data and statistics. The 2nd quarter projections will refine this number. It may go up or may drift down slightly.
• Mr. Abinanti asked for the offsetting revenue for this account as well as a breakdown of the percentage of aid (reimbursement). Mr. Phelan will provide.
• Mr. Abinanti stated that there is a philosophical assumption that could be supported by arguing that we’re paying too much money for this program. There is something relative to this pending in Legislation Committee, a push by NYSAC and others to try to get the County out of this business. If a very high number is shown here then it makes it look like a significant burden on the County, when in fact it is not that high a number, there are offsetting revenues. Mr. Phelan stated that despite what the revenue picture tends to be, this has always been a significant expenditure for the County. The program was stable in 1992, 1993, and 1994. The proposed changes at the state level created additional responsibilities which created an additional burden on the County. The number of enrollees in the education and transportation program has increased from 2500 to 3600 in one year. It is a tax levy burden for the County since it is mandated. The burden is compounded by a promise of 59% aid and the delivery of less than 50%. Mr. Abinanti stated that the message is that the state is not living up to its commitment.

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• There is a shortfall in health insurance line. Currently working on this number to bring it more into control. Employee health insurance fund is $15 million of accrued liability. $9.5 million of the accrued liabilities is for bills for services rendered in October, November and December for which we have not spent out any monies yet. The other $5.5 is a restricted fund balance in the internal service fund. This $5.5 million has no liabilities attached to it. These monies are being invested and interest being earned on it. Mr. Phelan stated that the employee health insurance fund of $29,277,000 includes all claims for 1996. Currently Budget is not showing any draw down against the unreserved balance.
• Another problem is the workers compensation fund. As in the 1st quarter of 1995 projecting a need for an addition $1 million. Workers Comp gets charged to the districts as well as WCMC. We have not experienced a shortfall in the employee health insurance fund for 3-4 years.
• Mr. Abinanti requested actual figures for 1994 and 1995 state and federal aid.
• Mr. Abinanti requested the actual year end revenue loss in the County Clerk’s office.
• Not projecting any additional needs for certioraris.
• The Medical Center’s projection is that they will not need additional tax levy. They are holding back on vacancies. Considerable shortfalls in the expense category including the Bradhurst building. In the $5.4 million shortfall is the Bradhurst building (-$1.4). Mr. Phelan stated that this is not a shortfall, rather a transfer that is currently before the Budget Committee, to increase WCMC’s expenses for the payment of the Bradhurst rent which is offset by transfers from General Services and health Department into the Medical Center to pay that rent, so for the Medical Center, it washes. Currently have projected the shortfall in GS, working with GS and Health Dept. to get a reconciliation as to what department will absorb the cut.
• Another variance from WCMC’s budget is their share of the 6N and 6J funds. Mr. Phelan stated that they are well aware of what their requirements are for funding these accounts. Mr. Boland requested a breakdown of the $5.4 million expense variance in WCMC.
• Potential $600,000 shortfall in RTI due to drop in occupancy rates. This is being looked at very closely by the Commissioner. Mr. Phelan stated that rates are down due to negative publicity as well as increased competition.

The discussion of Year End Transfers will be continued on Monday, May 20th at 3:00 p.m.

On motion of Legislator LaMotte, seconded by Legislator Young, the motion to approve the Minutes of May 6, 1996 and May 7, 1996 was carried by a vote of 6-0.

There being no further items for discussion, on motion of Legislator Darcy, seconded by Legislator Abinanti, the meeting was adjourned at 4:50 p.m.