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Cook County FY2013 Executive Budget Briefing
- 1. Embargoed Until 12:00 p.m. on October, 18 2012 Executive Budget Briefing Cook County FY2013 Executive Budget Recommendation October 18, 2012 Toni Preckwinkle President, Cook County Board of Commissioners
- 2. Embargoed Until 12:00 p.m. on October, 18 2012 Our Vision and Goals Our Vision Our Four Goals “Accountable to its citizens, Cook Fiscal Responsibility County will be transformed into the best-run County in the country – a County led by its Board President with an Innovative Leadership unwavering commitment to open, honest and efficient government that provides higher Transparency & quality services at lower costs.” Accountability - Transition Report Improved Services Source: Cook County Transition report, Cook County Ordinance – Performance Based Management & Budgeting (2011) 1
- 3. Embargoed Until 12:00 p.m. on October, 18 2012 Declining health revenues, sales tax rollback, rising labor costs and debt led to a $268M gap and dismal outlook 2
- 4. Embargoed Until 12:00 p.m. on October, 18 2012 Our Framework for this Budget • Saved taxpayers over $440 million Finalize Stroger • Absorbed impact of $86M in lost 2013 revenue Sales Tax Repeal • Saw $10M in additional annual sales tax growth • Reprioritized projects to mitigate $700M in „09-10 Stroger borrowing Invest in Long-Term • Investing in future cost-saving efforts beyond 2013 Finances & Services • Denying $152 million in additional requests • Setting the County up for pension reform success • Expect to bring in $99M in net revenue via 1115 Waiver Advancing a • Shifting health system from “sick care” to true health care Regional Health • Reducing CCHHS expenditures by $27M outside of waiver Care Model • Improved physician billing • Reducing real expenditures, positions, headcount Does Not Rely on • 99% structural changes One-Time Fixes • No additional debt restructuring • Commitment to protecting fund balance • Conservative revenue/expenditure estimates 3
- 5. Embargoed Until 12:00 p.m. on October, 18 2012 Final Budget Requests and Our Recommendation 2012 2013 Final 2013 President’s 2012 Budget 2010 Budget (All budget figures in $ Millions) Budget Request Rec. vs. 2013 Rec. vs. 2013 Rec. President‟s Office 92.5 92.7 92.7 0% -14% Public Defender 55.9 55.6 55.6 -1% -3% CCHHS Subsidy 253.7 253.7 253.7 0% -35% Sheriff 423.8 443.5 443.5 5% -3% Chief Judge 132.7 137.3 135.5 2% -13% State‟s Attorney 91.5 90.7 90.7 -1% -8% Clerk of the Circuit Court 74.1 73.2 73.2 -1% -8% Juvenile Temp. Dtn. Ctr.* 40.6 45.1 41.9 11% 8% Assessor 21.7 22.7 22.7 5% -13% County Clerk** 31.4 26.2 26.2 -17% -23% Board of Review 7.5 8.2 8.2 16% 2% Board of Comm. 7.3 7.4 7.4 1% -5% Recorder of Deeds 5.6 5.6 5.6 -1% -26% Treasurer 4.8 3.9 3.9 -18% -28% Inspector General 1.7 1.7 1.7 -1% 43% Public Administrator 1.2 1.2 1.1 2% -6% *JTDC under transitional administrator control; **Includes Election Fund 4
- 6. Embargoed Until 12:00 p.m. on October, 18 2012 We are continuing our reduction of expenditures, headcount and positions Cook County Operating Budget Cook County Employees 26,000 25,613 25,500 $3,075 $3,057 $3,055 Budgeted Millions 25,000 FTE $3,050 24,500 23,985 $3,025 24,000 23,659 Employees $3,000 23,500 23,151 23,197 Filled $2,975 $2,955 23,000 22,742 $2,949 Positions 22,500 $2,950 21,823 21,712 * 22,000 $2,925 21,500 $2,900 21,000 2010 2011 2012 2013… 2010 2011 2012 2013 Year (Projected) Data represents active employees on March 1 of each year * 2013 projection includes 1115 waiver investment of 247 positions, and potential reduction of custodial positions due to managed competition Charts include General Fund, Special Purpose Funds and Grants 5
- 7. Embargoed Until 12:00 p.m. on October, 18 2012 Focused first on cutting expenditures to complete the sales tax rollback and investing in long-term savings Key Expenditure Cut Highlights • Eliminating 462 total positions – 27M • Collaborating between City-County to reduce and avoid costs – 24M* (recurring, since 2011) • Reducing health care, drug and benefits costs – 9M • Energy savings reducing electricity and gas usage – 5.6M • Managed competition of custodial work – 2M • Achieving procurement savings and efficiencies – 3M *(incremental) • Terminating unnecessary leases and consolidating real estate – 1M • Fleet reduction and instituting ZipCar/iGo-like programs – 300K Key Productivity Investments • Keeping track of Transportation and Highways Department employees via GPS • Increasing labor productivity via our absence management program Key Long-Term Savings Investments • Investing in capital improvement and renting out coveted downtown real estate • Moving the Board of Review from all paper to electronic case management • Providing unincorporated communities with incentive to build infrastructure and incorporate • Automating other property and tax departments to reduce future personnel needs • Investing in employees health and plan redesign via wellness to lead to long-term health savings • Reducing workers compensation backlog by providing direct settlement authority to a higher number of claims adjusters 6
- 8. Embargoed Until 12:00 p.m. on October, 18 2012 Investing in budget priorities and service improvements for both residents and businesses Key Public Safety Investments Highlights • Continuing JTDC population reduction and closing an additional wing • Investing in personnel and resources in bond court resulting in fairer bond amounts • Directing resources towards alternatives for prosecution in the State‟s Attorney Office • Utilizing the Public Defender‟s Office for Child Protection Cases rather than outside counsel • Reducing overtime at the Sheriff‟s Office via medical call-in and better absence management • Investing an additional $2M in jail population reduction Key Service Improvement Investments for Businesses • Set up electronic payables and direct wire transfers to pay vendor in 7 days rather than 37 • Launched a $200 million financing initiative to increase access to capital for small businesses • Increased cash flow for small businesses by mandating vendors pay subs within 14 days • Providing an OCIP to lower insurance costs for small businesses in construction • Moving towards adopting an International Building Code to align building practices with other municipalities Key Service Improvement Investments for Residents • Investing in the next phase of our property tax website to provide more online services • Investing in a solid waste plan to divert valuable materials from landfills to increase jobs • Implementing an online Building and Zoning permitting system to increase response times 7
- 9. Embargoed Until 12:00 p.m. on October, 18 2012 Our Strategic Revenue Priorities All Tax/Fee Revenue Initiatives • Increasing the cigarette tax by $1/pack to promote public health – 25.6M • Levying a tax on gambling machines to fund public safety – 1.3M • Instituting a firearm and ammunition tax to fund public health and safety – 1M • Incentivizing businesses to buy within Cook County (“non-titled use tax”) – 15M • Eliminating Building & Zoning Fee Waivers – 250K • Increasing Medical Examiner, Highways Fees – 200K 8
- 10. Embargoed Until 12:00 p.m. on October, 18 2012 Other Non-Tax/Fee Revenue Initiatives Key Initiatives • Applying for the 1115 Waiver, and making the appropriate investment – 99M • Increased, conservative revenue growth – 13.5M • Increased federal payment due to move towards electronic medical records – 8.7M • Improved CCHHS billing services – 7M • Capturing new properties coming on the rolls in property tax – 3M • Cracking down on scofflaw businesses and unpaid violations and citations – 4M • TIF surplus – 1.4M 9
- 11. Embargoed Until 12:00 p.m. on October, 18 2012 Top priorities included long-term financial planning Previous administration left County in precarious shape • Significant borrowings in 2009-10, including $80M for unfunded pension contributions • Capital borrowings of $700M leading to a scheduled $90M increase in debt service levy We needed to protect Cook County’s long term future • Rebuilt fund balance from $61M in 2010 to $197M in 2013 • Budget is entirely structural changes except for $3.9M in one-time revenue (TIF surplus, settlements, special fund sweeps) • Reprioritizing capital funding and stretched projects to limit 2011-13 borrowing 99% structural changes allow us to pursue pension reform • Our structural changes allow us to pursue a solution without overburdening taxpayers • Understand that shared sacrifice is necessary, with government committing to fund its share 10
- 12. Embargoed Until 12:00 p.m. on October, 18 2012 Cutting expenses and investing in the 1115 Waiver 11
- 13. Embargoed Until 12:00 p.m. on October, 18 2012 The 1115 Waiver allows us to invest in a regional health care strategy Moving from sick care to health care • Out in communities • Primary and preventative care • Coordination of care 1115 Waiver allows for this strategy to be viable • Federal government investment • Allows 115,000 Cook County residents to receive better care at CCHHS • Provides increased access to care through FQHCs and other partners Focusing on three critical items for strategy to be successful • Improving operations – billing, how we buy supplies • Great patient experience • Creating structure and priorities for regional partnerships Regional health care will be a massive but critical undertaking which will have an incredible public health impact 12
- 14. Embargoed Until 12:00 p.m. on October, 18 2012 What’s Next Commitment to pass budget prior to FY2013 fiscal year Oct. 18 – Early Nov. Early Nov. – Nov. 16 Dec. 1, 2012 – Nov. 30, 2013 Budget Gather feedback Pass budget accountability • Hold department hearings • Amendments will be • Quarterly review sessions with Finance Committee presented over next 3 via STAR weeks • Hold public hearings • Implementation of 1115 (North, South, West, City) • Amendments must be Waiver Plan budget-neutral • Incorporate feedback into • Increased budget controls budget revisions, as • Present budget for Board via quarterly reports & necessary vote allocations 13
- 15. Embargoed Until 12:00 p.m. on October, 18 2012 This is a Forward-Looking Budget Finalize the sales tax repeal • $440M in tax burden relieved from consumers Protect our fund balance • Grown from $61M to $197M in three years Invests in key policy priorities • Stabilizes our health system and creating a regional health model • Furthers criminal justice reform 99% structural changes • No additional debt restructuring savings used to plug operating budget • Reduced expenditures, headcount and positions, even when including 1115 Waiver Investment 14
Hinweis der Redaktion
- Left unaddressed, this is the future that we face.We have a structural problem which required structural solutionsHere’s what’s driving the problemSales Tax RollbackDeclining health revenueRising Labor CostsDebt Service
- There are four key parts of my budget – the sales tax, investment in long-term finances and services, stabilizing our health system, and providing a budget that does not rely on one-time fixes.Sales tax – delivering on the biggest promise I made to Cook County taxpayers, delivering on the final installment of the sales tax rollback. And I’m doing it in a tough economy, saving taxpayers $440 million.Invest in Long-term Finances and Services – Previous administration took on $700M in debt and increased spending – what we’ve had to do is make structural changes to set ourselves up for long-term sustainability, including initiatives such as pension reformAdvancing a regional health care model – I fought for the 1115 Waiver in Springfield and in DC – going to both cities multiple times. I made this my top legislative priority, and now it is within our reach.Does Not Rely on One-Time Fixes – As I said, we have structural problems that require structural solutions. We are not using fund balance or doing any debt restructuring – these are 99% structural changes.
- We started with a $268 million gap. Then the offices came in with their first requests, and we had to deny $152 million worth of those requests.We’ve largely been able to come to agreement with these offices, because we have been able to hold them accountable in the years past.We are keeping the Health subsidy flat.We have increased the Inspector General’s Office budget by 43% over the last 3 years. The three offices that we did not agree with are the Chief Judge, JTDC and Public Administrator, which Andrea can explain.[Ask Andrea for comment on Chief Judge, JTDC, Public Administrator]
- I’ve cut the operating budget by over $100M since taking officeI’ve reduced the number of positions by over 2,600 as well as headcount by almost 1,500 over the last 3 yearsWe have been able to achieve this in partnership with other offices and our labor unionsFOOTNOTE: The count of filled positions is a snap shot for each fiscal year, calculated by pulling the number of active employees in the payroll system for the first pay period of the second quarter. Choosing the first pay period of the second quarter allowed for workforce reductions proposed in the budget to be fully realized by the time of the snapshot. The 2013 filled position estimate was calculated by taking the number of active employees and subtracting 180 for managed competition, 12 for proposed 2013 reductions in the Offices Under the President, and adding 247 for the 1115 Waiver.
- True to our commitment to be fiscally responsible, I told my budget director to look first at where we can cut so that we can achieve the sales tax rollbackI’ve done this by eliminating 462 positions, principally vacanciesWe are also focused on long-term financial health.We want to understand where our trucks are at all times and no more people sitting on the side of the road, reading newspapers.We’re investing in county buildings to eventually rent out coveted downtown real estate [story about your own office over there]We’re bringing other county departments, including the Board of Review, into the modern age. Instead of having boxes and boxes of paperwork cluttering up the 6thfloor, we’re making those records electronic and that has helped us get property tax bills out on time.Lastly, I am following up on my commitment to end unincorporated areas in the next decade. Through the unincorporated task force I convened last year, we found that one of our biggest challenges in getting unincorporated areas to incorporate was the lack of relatively expensive underground infrastructure such as sewer mains. We are creating a fund that can be utilized to invest in infrastructure so that they can be open to incorporation with municipalities.
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- Explain the 1115 Waiver – What is it? How does it Work?
- We have rebuilt the fund balance from $61M to $197MThe budget is entirely structural except for $3.9M in one time revenues. These are the TIF surplus, settlements from court cases, and sweeping from special fundsWhat this budget has allowed us to do is set the table on pensions. Our pension system is 57.5% funded and will be insolvent by the year 2038.We’ve had dozens of meetings with our labor unions, and have been meeting there for over a year.We know there are 12 variables that will have an effect on the funded status. These include things like age, multiplier, COLA, retiree health care, cap on pensionable earnings and so on. There are literally millions of possible solutions, and we have examined a number of different solutions with different labor leaders and understand the full set of options available to us and their financial impact.We know what it will take to get there, and that Cook County needs to be ready – this budget, with its structural changes, allows us to get there.I can’t go any further without having legislative action. But we stand at the ready.
- Dr. RajuKey CCHHS Expenditure HighlightsCutting expenditures by $27M outside the 1115 Waiver1115 Waiver will bring in an additional net $99 million in revenueSubsidy will remain flat at $254MKey CCHHS Operational Efficiency HighlightsReduced contracts and supply chain costs – 25MDeleted 391 vacant positions and reallocated others towards 1115 waiver – 28MReduced overtime costs based on additional hiring and better management – 13MInstituted pharmacy best practices on generic drugs – 14M
- Dr. RajuSick Care to Health CareOur vision is that in five years, every Cook County resident will have access to quality primary care and coordinated specialty care, improving health outcomes and lowering costs. We want to create a true system of care.Examples from moving from sick care to health care: medical home example-- a father of a college freshman has a heart attack, is rushed to the ER where doctors perform bypass surgery, and is put on a lifelong regimen of medication to control his condition. But what if there was a better way? In the medical home model, that patient might have been diagnosed with high blood pressure in his thirties. A patient-centered coordinated model provides every patient with a medical care ‘home’—a primary care doctor who is responsible for their health, connects them with specialists when needed, and is alerted if they are admitted to a hospital. That doctor is continuously and comprehensively responsible for that patient’s wellness. One where the clinics/workers are out in communities, focused on primary/preventative case, and coordinate care.Examples for critical items:2 hour meetings on billing first thing Monday morningBuying supplies more cost effectivelyImproving ER Wait TimeChanging to a patient-centric model with less waiting rooms/timePartnership with Mt. Sinai on rehabilitative center1-on-1 meetings with area hospital CEOs on regional partnershipsWe would appreciate the opportunity to come back to you and lay out our plan for a regional health care strategy