PUBLIC PROTECTION COMMITTEE
Meeting Date: February 18, 2025
Subject: FY 2025-26 Public Safety Realignment Community Corrections Budget
Presenter: Esa Ehmen-Krause, CCP Chair; Enid Mendoza, CCP Staff
Contact: Enid.Mendoza@cao.cccounty.us
Referral History:
In 2011, the State enacted the AB 109 Public Safety Realignment Act, which diverts the custody housing and supervision of individuals convicted of certain state prison offenses to the local county level. It also directs the State to give counties a portion of sales and vehicle license fee revenue to fund the realigned responsibilities from the State to the counties.
The State’s Community Corrections allocation formula is composed of a Base allocation and a Growth allocation. The Base allocation is derived from current year sales tax and vehicle license fee (VLF) funding, and the current year Growth allocation is derived from prior year actual sales tax and VLF funding from the State. Since passage of AB 109, the Growth allocation has been more volatile than the Base allocation due to varying economic factors.
The Growth allocation formula is based on 80% felony probation rates (60% felony probation success rates, 20% year-over-year felony probation improvement for counties showing improvement) and 20% incarceration rates (10% county reduction in year-over-year overall prison admission, 10% county success measured by per-capita rate of prison admissions).
Although the County has accumulatively benefited from AB 109 Community Corrections Growth allocations over the years, they have ranged from no growth allocation (County FY 2020-21) to a little over $5 million (County FY 2022-23).
For reference, Attachment A provides a 5-year Base and Growth allocation summary for each county from FY 2020-21 to FY 2024-25 as of the Governor’s 2024 May Revise.
In preparation for the County’s budget development activities, which begin the first week of January annually, the AB 109 Community Corrections budget activities begin in the fall of the prior calendar year to ensure timely approvals. The AB 109 Community Corrections Partnership budget is included in the County’s annual recommended budget, upon approval of the Community Corrections Partnership - Executive Committee in December and review by the Board’s Public Protection Committee no later than mid-February. A detailed FY 2025-26 budget development schedule is included in Attachment B.
In a memo dated October 1, 2024, departments were asked to submit a FY 2025-26 Community Corrections budget upon assessing prior years’ program budget allocations and actual expenditures to right size budget proposals where under-expenditure trends exist. Departments were advised that any programs or expenditure categories no longer needed in FY 2025-26, should be reflected as program modification reductions. Departments were given until October 30 to submit their budget proposals. County Administration staff worked with departments on their budget proposals through November 7.
Referral Update:
On November 15, 2024, the Community Corrections Partnership - CCP Executive Committee held a budget workshop, giving funded departments and agencies an opportunity to present and discuss their budget proposals. The workshop is the Partnership’s opportunity to ask questions on departments’ budget proposals and may at times ask departments to modify or correct budgets and return with a final proposal to the CCP-Executive Committee for its annual December meeting. The following documents were included in the Partnership’s November meeting and later approved at it December 20, 2024 meeting:
1. Attachment C - a summary of the expenditure categories as budgeted in current year and a breakdown of baseline FY 2025-26, FY 2025-26 budget modifications, and total FY 2025-26 budget allocation requests, by department program area.
2. Attachment D - a compilation of all department budget submissions including a budget narrative, more detailed budget categories, and details on planned contracted services.
Staff also reported a summary of the percentage change between the proposed and current year budgets and the information provided by departments to explain the change, which was also provided to the CCP-EC as Attachment E.
Staff shared that the department proposals reflect budgets prudent to community corrections revenue limitations. Figures presented to the Partnership included a flat Base allocation of approximately $37 million and no Growth revenue due to a shortage in last year’s State Local Community Corrections revenue, which the State planned to backfill a portion of the shortage and flatten County allocations for two fiscal years to minimize the impact to counties.
Following staff’s budgetary considerations presented to the Partnership at its November and December meetings, the Governor has issued his January Proposed Budget, which results in a County estimate of $38,452,551 in FY 2025-26 Base and a Growth allocation of $1,432,878 ($143,288, or 10%, of which must be transferred to the County AB 109 innovation fund as set by statute) in FY 2024-25 Growth (to be allocated in FY 2025-26). This total estimate of $39,742,141 results in a reduced amount of fund reserves ($2,173,750) needed to balance the proposed FY 2025-26 budget, which was initially assumed to be approximately $5 million.
Although the budget presented reflects the use of reserves from the Public Safety Realignment fund, departments are unlikely to expend their full allocations in FY 2025-26 due to ongoing vacancies and staff turnover. Additionally, the last four years of actuals show under-expenditures between $4-6 million per year. Maintaining a healthy reserve is enforced by the County’s Community Corrections reserve fund balance policy, which requires 50% of budgeted expenditures. Also important to note is the current $15 million in obligated fund balance as approved by the CCP-EC, PPC, Board of Supervisors to draw down the growing reserves for one-time projects that can address immediate needs of the County’s reentry population.
Recommendation(s)/Next Step(s):
REVIEW and APPROVE the fiscal year 2025-26 AB 109 Public Safety Realignment Community Corrections budget totaling $41,915,891, as submitted by operating departments and approved by the Community Corrections Partnership - CCP Executive Committee at their December 20,2024 meeting, for inclusion in the County’s FY 2025-26 Recommended Budget.
Fiscal Impact:
If approved as submitted, the FY 2025-26 budget will result in funding allocation recommendations totaling $41,915,891, which would require an approximate use of fund balance allocation of $2,173,750 million over the anticipated State revenue. Though the fund’s reserve has sufficient fund balance to cover the amount to balance the operating departments’ expenditure plan, it is important to recognize that ongoing expenditure increases will put pressure on the known flat Base allocation and overall fund balance reserves in the upcoming years.