Ventura County Budget Analysis:
FY 2012-2013
Harben Porter
Dr. Janey Wang
San Francisco State University  Public Administration 730
May 20th, 2013
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Table of Contents
Introduction……………………………………………………………………… 2
Organizational Chart…………………………………………………………….. 4
Budget Process…………………………………………………………………... 5
Expenditures.…………………………………………………………………….. 8
Revenues.………………………………………………………………………...10
Reserve Policy…………………………………………………………………...12
GFOA Evaluation…………………………………………………………...…...15
Discussion and Recommendations………………………………………………16
Appendix A………………………………………………………………………19
Appendix B………………………………………………………………………20
Appendix C-1…….………………………………………………………………21
Appendix C-2.……………………………………………………………………21
Appendix D………………………………………………………………………22
GFOA ……………………………………………………………………………23
References ……………………………………………………………………….29
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Nestled between Los Angeles and Santa Barbara, Ventura County is a 2,200
square-mile expanse that encompasses 43 miles of picturesque southern-pacific coastline.
The county is home to ten incorporated cities, and 24 unincorporated communities.
Ventura boasts six nationally protected areas, many of which are considered some of
Southern California’s last remaining and most pristine untouched wilderness. As outlined
by the county’s mission, Ventura aims to “provide superior public service and support so
that all residents have the opportunity to improve their quality of while while enjoying
the benefits of a safe, healthy and vibrant community” (Ventura County, 2013). The
region is home to 835,981 people, with 50% of the total population self-identifying as
White, 40% self-identifying as Latino, and 7% of the population self-identifying as Asian
(Census Data, 2010). Ventura County is comprised of safe and outdoor-oriented
communities; the FBI consistently rates cities within Ventura County among the safest in
the nation. Two four-year universities, three community colleges, and many reputable
public K-12 education institutions make Ventura a desirable county to reside and work in.
The population has steadily, yet modestly grown over the past decade, and the county is
ranked the 12th largest among California’s 58 counties.
The Ventura County Chief Executive Officer, Auditor-Controller and Board of
Supervisors achieves the County’s mission to serve taxpayers and customers through key
accountability goals. These goals include timeliness; responsiveness; efficient use of
technology; action-oriented and outcomes-driven behavior; utilizing a systems approach
to problem resolution; insuring active involvement of stakeholders; supporting an
environment of continuous improvement with defined quality, results, cost and
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performance; and Benchmarking performance (Ventura County, 2013). In accordance
with these goals and the overarching mission of the county, the Ventura County Chief
creates an annual budget manual to accompany the proposed budget.
The process of creating the manual begins at the start of the fiscal year, and serves
to both inform the public, and initiative a steady dialogue between departments. An
organizational chart outlining departments and networks may be found on the following
page. Additionally, a Finance and Budgeting Department organizational chart may be
found in Appendix A. As a result of the ongoing inter-department dialogue embedded
within the budget process, Ventura County was able to pass their proposed Fiscal Year
(FY) 2012-2013 budget in less than 30 minutes this past year; a county record for both
efficiency and widespread acceptance. The yearlong communicative efforts of the County
Executive Officer (CEO), Michael Powers, and department heads created a 2012-2013
budget approval meeting in which no special additions were requested throughout the
hearing. The approval of the $1.72 billion dollar budget marked the third consecutive
year that the County was able to balance the budget without any major cuts in services or
county government jobs (Wilson 2012).
Though a thirty-minute hearing is a countywide record, Ventura County has
operated with a balanced budget for the past five years. In light of the economic
downturn, the County has established procedures and measures to streamline
communication, and make the tough budgeting decisions in a transparent and timesensitive manner. Difficult choices have been made, including that to use general fund
balance reserves to offset decreased revenue, however, the County has managed
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to maintain a balanced budget in spite of the recession and federal and state budget cuts.
In the years to come, Ventura County will face a challenge that has long been on the
horizon as a potentially debilitating reality. Over the next five years, pension costs are
scheduled to increase in a manner that is not fiscally sustainable for the County, and as
such, strategic measures are being made to attempt to maintain Ventura County’s
longstanding history of a balanced countywide budget. The remainder of this paper will
outline Ventura County’s budgetary process, and analyze trends of the county’s revenues,
reserves and expenditures. The Government Finance Officers Association (GFOA)
guidelines will be used as a tool for budgeting analysis, and finally, recommendations for
the county’s budgeting process and format will be made.
BUDGET PROCESS
Ventura County’s budget is organized using a line-item budget change, in which
General Fund targets are made based on incremental changes to forecasted net costs and
targets, and non-General Fund targets are formed at a zero-base (Ventura County, 2013).
The Fiscal Year runs July 1st to June 30th, annually. The budget process is ongoing,
however, the first deadline of the process takes place each year in February. By the end of
February, the Chief Executive Officer must release the Budget Development Manual, a
document detailing meaning and summaries of the various facets of Ventura’s budget. At
that same time, the second quarter APOG Budget Status Report must be given to the
board. The month of March is reserved for department head budget meetings. It is within
these meetings that the greatest and most monumental compromises and decisions are
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made. The time and effort displayed throughout the month of March is evident in June
when budget hearings take place. In addition to department head budget meetings, both
non-general fund and general fund requested budgets are due for consideration.
Appendix B. provides a detailed look at the budget request procedure. Deliberation
continues through the start of June, at which the preliminary budget book is distributed,
recommendations are presented to the board of supervisors, and official hearings begin
(Ventura County, 2013). Figure A. outlines Ventura County’s Budget Process Calendar
for FY 2012-2013.
Table A.
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Development of the Ventura County Budget Development Manual is a large and
key component to a smooth and successful budgeting process. “The primary purpose of
the Budget Development Manual is to establish procedures and guidelines to standardize
the preparation and submittal of all the basic and supplemental information which
represent a department's budget” (Ventura County, 2013). The manual should be thought
of as a guide to be utilized throughout the County’s budget cycle, to increase consistency
and efficiency by all departments throughout the budget preparation. In addition to
creating continuity throughout the budgeting process, the manual identifies key
development roles for various departments. “For example, the Information Technology
Services Department and General Services Agency review applicable service requests
from departments, as well as prepare centralized service Internal Service Fund rates while
the County Executive Office is designated to review department budget estimates and
develop recommendations for Board of Supervisors consideration” (Ventura County,
2013). Ventura develops their manual in compliance with a combination of state codes,
guidelines and local administrative directives.
The budget process for Ventura County involves the development of three
separate increments: base, restoration, and supplemental. All three increments include a
Department Request component and a Preliminary Budget Component to reflect the
County Executive Officer’s recommendations.
Base
The Base reflects the projected full cost of the current year’s program levels, and
is referred to as the “Target” in the General Fund. The base incorporates salaries,
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benefits, mid-year board-approved appropriates and revenue changes, inflation
adjustments and an elimination of one-time, non-recurring expenditures and revenues.
The CEO uses the Base to issue Net Cost Targets to departments under the jurisdiction of
the General Fund. Department heads are then responsible for submitting Base Requests at
Net Costs Levels equaling the Target. Those departments that are Non General Funds are
responsible for submitting Base requests from zero, as opposed to entering variances to a
set of figures initially provided by the CEO.
Restoration Requests (usually General Fund)
Restorations represent the difference between the FY 2012-2013 CEO forecast
Net Cost and the Target Net Cost. They are used to request a reinstatement, either full or
partial, of a budget to its current year’s program levels if service level reductions are
found in the Target.
Supplemental Requests
Workload-related increases, funding for programs previously revenue offset,
program enhancements, new programs and new fixed asset items are all examples of
Supplemental items. Any request to restore a service level reduction from a prior fiscal
year (or midyear adjustment) should be submitted as a supplemental request. All of these
funding requests should be accompanied with specific justification information.
Supplemental requests recommended for funding by the CEO will be incorporated into
the Preliminary budget of the individual budget unit.
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EXPENDITURES
In reaction to federal and statewide budget cuts, Ventura County has adopted
stringent and calculated spending practices to maintain a balanced budget in light of
shrinking revenues. In the General Fund, appropriations of $877 million increased by
0.5% over the previous fiscal year due to an increase in salaries, employee benefits and
retirement costs. The increase in General Fund costs are partly offset by decreases in
services, supplies, ISF charges, direct aid payments and debt service. Between FY20112012 and FY 2012-2013, composite payrolled employer contribution rates for retirement
increased from 22.43% to 23.82%, resulting in a $12.5 million dollar increase in total
County employer contributions. According to Paul Derse, Ventura County’s Chief
Table B.
General Fund Expenditures FY 2008-2013
FY 2008-2009
FY 2009-2010
FY 2010-2011
FY 2011-2012
FY 2012-2013
General Function
$69,285,580.00
$66,254,039.00
$70,022,139.00
$63,431,985.00
$61,466,580.00
Public Protection
$417,366,616.00
$404,591,602.00
$414,418,060.00
$368,617,468.00
$371,514,430.00
Public Ways and Facilities
$32,962,051.00
$43,839,949.00
$30,849,606.00
$35,280,125.00
$35,552,155.00
Health
$144,919,497.00
$147,899,204.00
$163,208,188.00
$137,438,051.00
$136,687,722.00
Public Assistance
$204,181,942.00
$216,818,391.00
$223,664,444.00
$190,978,070.00
$192,411,700.00
Education
$11,219,808.00
$10,491,456.00
$9,480,430.00
$8,241,245.00
$8,096,842.00
Recreation
$16,634,700.00
--
--
--
--
Debt
$18,805,035.00
$17,356,442.00
$11,036,690.00
$11,525,568.00
$10,599,826.00
Transfers Out
$49,831,372.00
$42,008,945.00
$43,169,080.00
$41,658,491.00
$60,790,813.00
$948,571,901.00
$949,260,028.00
$965,848,637.00
$857,171,003.00
$877,120,068.00
Total
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Financial Officer, retirement contributions and pensions are the single greatest challenge
the county faces in maintaining a balanced budget in years to come (2013). Table B.
represents General Fund expenditure over the past five years.
Total appropriations for FY 2012-2013 increased to $1.721 billion dollars,
representing an increase of 2.3% over the previous fiscal year. (Ventura County, 2013).
The increase is attributed to Health Care allocations that are mostly offset by an increase
in revenue. “Of the $1.72 billion in planned spending in FY2012-2013, half comes from
the general fund budget and the other half in budgets for special districts and selfsupporting entities. In compliance with a long-standing agreement, the board reserves
58% of general purpose revenue, or $186 million of $318 million, to public safety”
(Wilson, 2013). Table C. depicts financial requirements of all governmental funds for
FY 2012-2013. A breakdown of expenditures by department may be found in Appendix
C-1.
Table C.
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REVENUE
Ventura County routinely receives and generates revenue under eight different
categories. These areas are: intergovernmental revenue; taxes; charges for services; use of
money and property; licenses, permits and franchises; fines, forfeitures and penalties;
miscellaneous revenue; and other. These sources have not changed within the past five
years, save for the introduction of the “miscellaneous” category. The County’s single
largest revenue source over the past five years is Intergovernmental Revenue, however,
funds received from this source have fluctuated by $40 million dollars since 2008. Taxes
follow as the second largest revenue generator for the county, however, due to changes in
tax law in 2008, annual tax revenue sharply decreased in 2009 and has remained stagnant
thereafter. Please refer to Table D. for a more detailed look at revenue trends over the
past five years.
Table D.
Revenue FY 2008-2013
FY 2008-2009
FY 2009-2010
FY 2010-2011
FY 2011-2012
FY 2012-2013
Intergovernmental
Revenue
$502,861,400.00
$462,417,556.00
$471,889,653.00
$362,788,238.00
$446,168,175.00
Taxes
$415,828,100.00
$277,648,148.00
$278,549,970.00
$271,456,103.00
$283,611,082.00
Charges for Services
$414,164,600.00
$163,031,831.00
$170,709,489.00
$153,012,614.00
$178,614,218.00
Other Revenue
Use of Money &
Property
Licenses, Permits &
Franchises
Fines, Forfeitures &
Penalties
$148,259,800.00
$15,131,402.00
$13,022,331.00
$10,416,183.00
$16,298,235.00
$23,671,700.00
$7,088,745.00
$7,004,649.00
$2,038,079.00
$3,623,591.00
$20,612,000.00
$19,720,382.00
$19,861,283.00
$18,447,310.00
$20,336,258.00
$15,334,700.00
$20,908,989.00
$22,211,472.00
$20,185,764.00
$22,478,173.00
--
--
$24,396,207.00
$18,704,400.00
$22,366,149.00
$1,540,732,300.00
$965,947,053.00
$1,007,645,054.00
$857,048,691.00
$993,495,881.00
Miscellaneous Revenue
Total:
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Within the total revenues for FY 2012-2013, tax revenues increased by $5.8
million dollars, a 1.5% increase over the prior years’ budget amount. Additionally,
property tax revenue increased by $5 million dollars, or 1.7%. Since FY2009-2010, these
sources have remained fairly constant, and yet, the FY2011-2012 total actual revenue was
lower than the FY 2012-2013 budgeted revenues. The increases in budget revenue can
be attributed to nominal increases in taxes, licenses, fees, franchises and charges for
service (Ventura County, 2013). A chart depicting preliminary FY 2012-2013 revenue
sources for Ventura County as broken down by budget group for further clarification may
be found in Appendix C-2. A comparison of preliminary revenue and the adopted
budgeted revenues (Figure A) reveals that current year revenues are exceeding
expectations based on the attributes previously listed. The greatest source of revenue is
the General Fund, comprising 38.3% of all revenue for Ventura County in FY 2012-2013.
Following the general fund, Health and Human Services, the Department of Justice,
General Government and Environmental Balance follow in order of percentage of
contributed revenue.
RESERVE POLICY
The County of Ventura does not operate with a formal reserve policy.
Instead, they utilize the more informal year-end General Fund Balance reserve
mechanism to reserve a minimal amount of funding from fiscal year to fiscal year. In
March of this year, it was revealed that the county has been dipping into reserve funds to
pay for the county’s increasing expenses and to balance the budget. Over the past four
Figure A.
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years, over $10 million dollars have been taken out of the County’s cash reserves,
and have been replenished at exceedingly low rates. The Ventura County Star reports
that, “more than $10 million was diverted from three cash reserves: $4 million from
workers’ compensation, $4.5 million from employee benefits/vacation and $1.7 million
from public liability reserves, all used to close budget gaps” (Grau 2013). Table E.
depicts the General Fund balance history, of which funding was removed to balance past
budgets.
With a budget of $1.7 billion dollars in appropriations, a $126 million dollar fund
balance is fairly low in terms of offering the County fiscal stability in the wake of top-
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down budget cuts. General Fund balances are supposed to be reserved for crisis situations
and emergencies in the face of a depleted state and federal budget. As funding to
programs and departments is being drastically cut, Ventura County citizens were made to
feel at ease with the knowledge that their County was able to both create a balanced
budget as well as reserve fund balances to create a funding safety net. County employees
and elected officials have since been met with public outrage and will now have to regain
the trust of their stakeholders. Figure B. in Appendix D. provides greater detail into the
nature of Ventura County’s fund balances over the past five years.
Table E.
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GOVERNMENT FINANCIAL ASSOCIATION RATINGS
A comprehensive assessment of Ventura County’s FY 2012-2013 budget using
Government Financial Officers Association Rating (GFOA) system can be found in
Appendix E. Ventura County’s budget meets criteria for a “proficient” rating on the
GFOA scale. The strengths of the budget presentation are in the way that department –
based information is depicted. Department specific budget information was presented in a
way that was exceedingly digestible for the average citizen consumer; brief descriptions,
objectives and performance assessments were included to create a comprehensive picture
of the department specific operations. Also contributing to the “proficient” rating are the
consistency with which the data is displayed, as well the inclusion of summary schedules
to create an overall image of budget cohesion.
The budget lacked clarity in terms of objectives, priorities, debt services and
failed to distinguish between various appropriations and major funds. While supporting
documents such as the transmittal letter and budget manual assisted in the reader’s
analysis of the budget, the language in these documents was verbose and technical. Even
the transmittal letter, a letter meant for public consumption, framed gains and losses
between revenues and positions in a manner that called for multiple close readings and
budget manual comparisons to fully comprehend its meaning. The adopted budget lacked
essential charts and diagrams that would have assisted the reader in taking in the
information, yet, such charts were available in separate budgeting portals through
Ventura County’s main website. Overall, the budget lacked clarity and the documents
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meant to accompany it were subpar due to their language and their multiple gaps in
budget information.
DISCUSSION AND RECOMMENDATIONS
Despite weaknesses in Ventura County’s organization of budget data, the County
has addressed current and past fiscal constraints with sufficient practices to ensure
minimal layoffs and maintain program effectiveness in the face of state and federal
budget cuts. In designing the FY 2012-2013 budget, Paul Derse, Ventura’s CFO,
discussed difficulties in estimating overall revenues for the upcoming fiscal year, saying,
“Without accurate estimates of revenue you cannot determine
what programs you can and cannot afford to fund in the subsequent
year. Estimating revenues is especially difficult because of the variety
and complexity of the revenue sources. We receive a lot of our funding
from federal and state sources and when those governmental units are
retrenching, it makes it even more difficult to determine whether our
funding will be cut” (2013).
These unknowns have warranted an increase in fees for Ventura County citizens and
small business owners to cover an increase in expenditures. The $1.7 billion dollar
expenditure plan is based on projections based on an increase in revenues and fees. As it
stands, the Ventura citizens who will be most greatly impacted by an increase in fees
have begun to vocalize concern over the County’s budget policies.
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The County of Ventura's FY 2012-2013 budget of over $1.7 billion includes over
$715 million raised from fees or revenue enterprise zones. Taxpayers and citizens are
concerned that the County has estimated revenues and state and federal funding at a much
higher level than what will actually be made available; a fear that was validated when
word spread that Ventura has been dipping into reserves for the past four years to
maintain a balanced budget and accommodate expenditures. There is particular concern
as one looks toward the fate of future County budgets in light of increasing pension costs.
Currently, “Ventura County government is facing deficits of $6 million to $14 million
annually over the next three years because of mounting retirement costs” (Wilson 2012).
Budget projections show that annual pension contributions will grow from $151.7 million
to almost $226 million in FY 2017-2018, resulting in a 49 percent increase in pension
expenses. Future considerations for the fate of Ventura revolve around innovate
budgeting policies to account for these rising costs.
Ventura finished this past fiscal year in the black, due to the previously mentioned
increases in fees and utilization of reserve funds to cover expenditures. Looking forward,
the proposed FY 2013-2014 budget will address these concerns and prioritize repaying
the reserve funds that helped to maintain stability in revenue-strapped years while being
mindful of the great challenges pension expenses will bring the future. In regards to
future pension costs, Mr. Derse articulated that the County is striving to identify
innovative ways to maintain budgetary balance without comprising service delivery or
resorting to layoffs. Ventura’s hiring freeze will continue into the next fiscal year, and
County Finance officers are brainstorming methods to ease fiscal concerns.
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Though Ventura has a historically strong budget, there is room for improvement
within the County’s current budget process. The County should strive to make their data
and budget policies more accessible to the public. This may include updating and
streamlining language, and consolidating information so that it can be found in one
portal, rather than spread out among multiple Ventura website pages. The transmittal
letter could be formatted into a “user-friendly” memo to accompany the budget, rather
than a lengthy and technical Budget Manual. As the budget is also lacking debt policy,
appropriation limit and debt ratios, including this information in a succinct and
comprehensive budget will increase fiscal transparency and help to regain public trust.
Lastly, as the County has already increased fees to offset expenditures, finance
officers should consider diversifying Ventura’s funding streams away from state and
federal dollars to ease the fiscal burden that consumer fees are supplementing. Ventura
County should increase its narrative information in the form of a budget memo to aid in
public accessibility. Though the County has taken fiscal measures to ensure a balanced
budget over the past five years, increasing pension costs will render these policies
insufficient and unviable. The County will have make radical changes in the years to
come if they hope to continue their history of balance and stability.
Appendix A-1
Budget Office Organizational Chart
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Appendix B.
Budget Request Process
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Appendix C-1.
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Appendix C-2.
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Appendix D.
Fund Balance
GFOA Ratings
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References
California State Controller’s Office (2012). Counties Annual Report. Retrieved on 5/2/13.
Retrieved from http://www.sco.ca.gov/Files-ARD
Local/LocRep/counties_reports_1011counties.pdf
California Census. (2010). State and County Quick Facts. Retrieved on 4/18/2013.
Retrieved from http://quickfacts.census.gov/qfd/states/06/06111.html
County of Ventura (2009). Adopted Budget. Retrieved on 4/18/2013. Retrieved from
http://portal.countyofventura.org/portal/page/portal/auditor/FINANCIALBUDG
T%20REPORTS%20Sub%20Pages/AB200910
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http://portal.countyofventura.org/portal/page/portal/auditor/FINANCIALBUDG
T%20REPORTS%20Sub%20Pages/Adopted%20Budget%202010-2011
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http://portal.countyofventura.org/portal/page/portal/ceo/publications/FY2012
13_Adopted_Budget.pdf
County of Ventura (2012). Budget Development Manual. Retrieved on 4/18/2013.
Retrieved from http://portal.countyofventura.org/portal/page/portal
/ceo/publications/FY2013-14_Budget_Development_Manual.pdf
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Retrieved from http://portal.countyofventura.org/portal/page/portal/ceo/
publications/FY2013-14_Budget_Development_Manual.pdf
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County of Ventura (2009). Budget Digest. Retrieved on 4/28/2013. Retrieved from
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T%20REPORTS%20Sub%20Pages/Budget%20Digest/0809digest.pdf
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PUBLIC_WORKS/engineeringservices/Capital%20Projects/CEO_Projects.pdf
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2013/sumscheds_13.pdf
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Derse, Paul. Phone Interview. Conducted on 4/10/2013.
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=view&id=33&Itemid=57
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Wilson, K. (2012). County Budget Adopted in Record Time Without Major Cuts. Ventura
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Wilson, K. (2012) Rising Pension Costs Creating County Budget Shortfalls. Ventura
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budget/