Process

The Board of Health convened a budget ad hoc committee that met a total of 11 times between April 18 and November 5. The committee reviewed proposed revenues and expenditures and gave instruction to staff regarding budget parameters and direction. The parameters, direction, and factors that went into the budget recommendation included:

1. Transition of Women, Infants and Children (WIC) to community partners effective June 30, 2020.

2. Reduction in Childcare Health Outreach, First Steps and non-represented staff members effective March 31, 2020.

3. Vacation and eligible sick leave payouts for affected employees, as well as anticipated unemployment benefits through Employment Security Department.

4. An average increase of 2.32% for 2020 medical rates through Public Employee Benefits Board (8 options), with the minimum increase of .83% and maximum increase of 4.31%.

5. An average premium increase of 6.50% for 2020 dental rates through Washington Counties Insurance Fund (2 options), with a minimum increase of 3.09% and maximum increase of 9.93%.

6. No increase in 2020 vision rates through Washington Counties Insurance Fund (1 option).

7. PERS employer rates increased from 12.83% to 12.86% as of July 1, 2019.

8. Increase transparency and clarity in the budget.

Proposed Operating Budgets

The budget presented at the July 12, 2019, ad hoc committee meeting had a deficit of $1.7M. The committee discussed and made tough decisions and settled on a balanced budget recommendation to the Board that includes the program cuts previously discussed. Staff took a detailed look at all expenditures for the previous 18 months when developing the initial budget and determined that there were minimal savings to be had in non-labor expenditures. This generated the discussion regarding future sustainability of the District without program cuts. In addition, long overdue repairs and maintenance for the Rucker Building have been included in the 2020 budget to increase marketability of potential leased space to other organizations that would boost revenue.

Components of the 2020 preliminary budget include:

1. Total expenditure reduction of $411,000 over the 2019 amended budget.

2. Staff reduction of 14.1 budgeted FTEs over the 2019 budget.

3. Continued moratoria on out-of-state travel by SHD employees unless required by grant or contract and approved by the Board.

4. Financial performance audit originally slated for 2019 to be completed during 2020.

5. Final implementation of budgeting software and development of a new budget format and budget calendar process for 2020 and beyond.

6. Hiring freeze with open positions filled by Board approval only.

Exhibit A is the preliminary budget by divisions. Attached as Exhibits B, C, and D are the 2020 preliminary budget, budget comparison document, and the draft budget adoption resolution. Attached as Exhibit E is a letter to the Board requesting consideration to continue the Childcare Health Outreach program in 2020. The net impact of this request to the 2020 budget proposal would be a deficit of $94,000.

The Board will hold two public hearings regarding the 2020 budget—one at the November Board meeting and the second at the December Board meeting, with final adoption of the 2020 budget expected at the December Board meeting.

Consistent with Resolution 19-20 and the revised Division of Responsibilities (10/8/19), the Board of Health has authority over the Health District budget.

No action required. Briefing only.