MEETING DATE
2/19/2015 |
BUREAU SUBMITTING THIS REPORT
Executive Office |
RESEARCHED BY (PRINT NAME)
Stephanie Scofield |
REVIEWED BY (PRINT NAME)
Alan Deal and Janice Bullard |
REPORT DATE
12/10/2014 |
APPROVED BY
Robert A. Stresak |
DATE APPROVED
02/02/15 |
PURPOSE
Decision Requested |
FINANCIAL IMPACT
Yes
|
| ISSUE: |
| Should the Commission authorize the Executive Director to pursue alternate cost savings options in budget discussions with the Department of Finance for FY 2015-16? |
| BACKGROUND: |
In February 2013, Department of Finance (DOF) informed POST that a 5-year decline in revenues to the Peace Officer Training Fund (POTF) were exhausting POST’s reserve account to the point that, if left unchecked, there will be a $5 million deficit by the end of FY 2014-15. Due to continuing reductions of revenue and a greater-than-expected number of reimbursable trainees in FY 2012-13, the deficit was projected to be $7.8 million. The unanticipated shortfall is based on a DOF projection that reflects steadily declining revenues to the Peace Officers’ Training Fund and a less-than-robust economic recovery in California.
In October 2013 the Commission approved an 18-month expenditure reduction plan to mitigate declining revenue into the Peace Officer Training Fund. This reduction plan projected a $7.8 million savings at the end of FY 2014-15.
The DOF projected revenue into the POTF to continue to decline into FY 2015-16. Staff began to analyze all budget areas for potential cost savings as DOF worked to define a revenue increase plan for the State Penalty Assessment Fund, the source of the Peace Officers' Training Fund revenue. A draft cost savings proposal was submitted to DOF in November 2014 in a proactive effort to reduce projected expenditures. Staff was told this plan may not be needed due to the larger efforts to address the continuing decline in revenue from the State Penalty Assessment Fund. Staff was not made aware there was potential of decreasing authorized positions until the Administration released the proposed budget on January 9, 2015. |
| ANALYSIS: |
On January 9, 2015, the Governor released the proposed budget for FY 2015-16. The Governor's Budget Summary (pgs. 84-85) discusses the State Penalty Fund. Refer to Attachment A. The Administration is proposing an 18-month outstanding debt amnesty program to address the declining revenue in the Peace Officers' Training Fund (POTF). This program would authorize those individuals with past due court-ordered debt prior to January 1, 2013, to pay the delinquent debt at a 50% reduction. The Administration is projecting revenue into the POTF to increase by $10 million due to this amnesty program.
Even with the increased projections, the proposed budget decreases the Commission's Administration allocation by $5.3 million to end FY 2015-16 with a projected $3.6 million reserve. The Administration budget encompasses staff salary and benefits and all operating expenditures and equipment. Refer to Attachment B for the proposed FY 2015-16 budget.
The decrease of $5.3 million includes a 30% decrease in POST's authorized positions. Currently, POST has 123 authorized positions. The FY 2015-16 proposed budget decreases the authorized positions to 86. While POST's staffing decreases, both programmatic areas, contracts and local assistance, increases to $20 million respectively. The Governor's budget summary states the reduction of staffing is necessary to maintain critical training programs and reimbursements to local agencies and promotes a more efficient state government.
Staff analyzed all POST services to California law enforcement. Significant decreases in service would occur should POST receive a 30% reduction in staffing. Attachments C-J describe each POST Bureau, program responsibilities, staffing associated with each program and overall impact to California law enforcement should a 30% staffing decrease occur. In summary, the impact of a 30% decrease in staffing would potentially result in the overall lowering of selection and training standards for California law enforcement in an environment that is demanding more training for law enforcement in such areas as interacting with persons with mental illness, use of force, bias and community relations.
According to the Department of Finance, the proposed cuts are preliminary reductions and further discussions will occur to assess the $5.3 million reduction. Staff feels there are other areas of the Commission's budget in which a $5.3 million savings could be realized. Several options for the Commission to consider are listed below:
Option A: Training Contracts
Decrease training contracts by $5.3 million. POST contracts with multiple presenters throughout the state to present mandated and optional training courses. POST executes approximately 85 training contracts each year. The number of training course presentations for each contract could be reviewed, with stakeholder input, to assess decreasing the number of presentations without fully cutting critical training programs such as the Supervisory Leadership Institute and Command College.
Option B: Local Assistance (Reimbursement)
Decrease local assistance by $5.3 million. This could be accomplished by reviewing all reimbursement plans to attain the needed cost savings. As an example, backfill could remain suspended for an approximately $2 million savings and Plan III (subsistence, commuter lunch, travel, and backfill) courses could be reviewed for suspension to incur an approximately $2.5 million savings.
Option C: Hybrid of Training Contracts and Local Assistance
Consider a hybrid of a decrease in training contracts and training reimbursements. A $5.3 million savings could be realized by decreasing both training contracts and local assistance. For example, backfill could remain suspended ($2 million savings) and all other components of reimbursement (tuition, travel, per diem, commuter lunch) could continue to assist local agencies. Training contracts could then be reviewed to incur the remaining $3.2 million needed.
The above three options are presented for the Commission's consideration to guide staff in budget discussions with the Department of Finance. There is potential that the increased revenue into the POTF from the proposed 18-month amnesty program may not be realized until the second half of FY 2015-16 and even into FY 2016-17. Staff will continue to work with the Department of Finance should this delay occur. It should be noted that if the increased revenue projections do not materialize further reductions may be needed. |
| RECOMMENDATION: |
| Staff recommends the Commission authorize the Executive Director to pursue one of the alternative cost savings options as enumerated in this report during FY 2015-16 budget discussions with the Department of Finance and the Legislature. |
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