Article VII — BUDGET AND FINANCIAL PROCEDURES AND

APPROPRIATION, REVENUE AND STAFFING LIMITATIONS*

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*Note -- Title amended by Ord. No. 5380 (N.S.), effective 3-15-79.

Cross reference(s) -- Definitions, § 20 et seq.; general rules, § 50 et seq.; chief administrative officer, § 120 et seq.; powers and duties of officers, boards, and commissions, § 51.

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SEC. 110. ALL OFFICES TO FOLLOW BUDGET AND FINANCIAL PROCEDURES SET FORTH IN THIS ARTICLE.

All officials, persons, officers, departments, services, institutions, districts, boards and commissions for whom or for which the Board is required to adopt an annual budget as provided for in Section 29000, et seq., of the Government Code shall be governed by the following sections of this Article which are general in their nature.

The Assistant Chief Administrative Officer/Chief Financial Officer shall perform all duties considered necessary by the Board of Supervisors, and the Chief Administrative Officer for the formulation of the County's annual budget and for the financial management of County operations.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. 10916 (N.S.), effective 10-10-24; amended by Ord. No. 10922 (N.S.), effective 11-21-24; amended by Ord. No. 10992 (N.S.), effective 6-12-26)

State law reference(s) -- Adoption of annual budget, Gov. Code, § 29000 et seq.

The Assistant Chief Administrative Officer/Chief Financial Officer, through the Chief Administrative Officer, shall provide a quarterly budget status report to the Board of Supervisors that may also recommend changes to appropriations to address unanticipated needs or to make technical adjustments to the budget in accordance with the County Budget Act. The reports shall include projections of appropriation and revenue variances by fund and budget unit through the end of the current fiscal year. These reports shall be placed on the Board's agenda consideration and posted online as required by law.

(Added by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. 10916 (N.S.), effective 10-10-24; amended by Ord. No. 10922 (N.S.), effective 11-21-24; amended by Ord. No. 10992 (N.S.), effective 6-12-26)

SEC. 111. ASSISTANT CHIEF ADMINISTRATIVE OFFICER/CHIEF FINANCIAL OFFICER TO SUPPLY FORMS FOR ESTIMATES OF (1) SALARIES AND EMPLOYEE BENEFITS AND (2) SERVICES AND SUPPLIES AND OTHER OBJECTS OF EXPENDITURES.

On or about the 10th day of February, the Assistant Chief Administrative Officer/Chief Financial Officer shall present to the officer who is the head of each office, department, institution and district and to each board and commission budget forms prepared by said Assistant Chief Administrative Officer/Chief Financial Officer on which such officer, board or commission shall prepare estimates of (1) Salaries and Employee Benefits expenditures and (2) Services and Supplies, Other Charges, Fixed Assets and Expenditure Transfers and Reimbursements for the next ensuing fiscal year.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; amended by Ord. No. 6272 (N.S.), effective 5-20-82; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. 10916 (N.S.), effective 10-10-24; amended by Ord. No. 10922 (N.S.), effective 11-21-24; amended by Ord. No. 10992 (N.S.), effective 6- 12-26)

SEC. 112. [RESERVED.]

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; repealed by Ord. No. 6272 (N.S.), effective 5-20-82)

SEC. 113. ESTIMATES TO BE SUBMITTED TO ASSISTANT CHIEF ADMINISTRATIVE OFFICER/CHIEF FINANCIAL OFFICER AND CHIEF ADMINISTRATIVE OFFICER.

The officer who is the head of each office, department, institution and district and each board and commission shall file with the Assistant Chief Administrative Officer/Chief Financial Officer and the Chief Administrative Officer on the forms furnished by the Assistant Chief Administrative Officer/Chief Financial Officer, itemized estimates of proposed expenditures required by such office, department, institution, district, board or commission for the next ensuing fiscal year, together with an itemized estimate showing the anticipated revenue from sources other than property taxation, that will accrue to the office, department, institution, district, board or commission and such additional information thereon as may be required by the Assistant Chief Administrative Officer/ Chief Financial Officer and the Chief Administrative Officer. The estimates of Salaries and Employee Benefits, Services and Supplies, Other Charges, Fixed Assets, estimated revenues, and Expenditure Transfers and Reimbursements shall be submitted as required herein not later than the 20th day of April of each year.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; amended by Ord. No. 6272 (N.S.), effective 5-20-82; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. 10916 (N.S.), effective 10-10-24; amended by Ord. No. 10922 (N.S.), effective 11-21-24; amended by Ord. No. 10992 (N.S.), effective 6- 12-26)

Cross reference(s) -- Preparation of budget for area agency on aging department, § 82.25; preparation of budget for department of the chief medical examiner, § 161.5; preparation of budget for department of human resources, § 200.5; preparation of budget for department of revenue and recovery, § 210.5; preparation of budget for department of animal control, § 211.4; preparation of budget for department of health services, § 232.3; preparation of budget for department of social services, § 255; presentation of department of planning & development services annual budget to commission, § 390; preparation of budget for department of planning & development services, § 393.1; preparation of budget for department of general services, § 398.4; preparation of budget for department of information services, § 399.5; preparation of budget for department of public works, § 454; preparation of budget for department of transborder affairs, § 535; preparation of budget for department of public defender, § 694; preparation of budget for department of alternate defense counsel, § 703.

(a) The purpose of this code is to establish guidelines in accordance with industry best practices, specifically the Government Finance Officers Association (GFOA) and the National Advisory Council on State and Local Budgeting, regarding the maintenance and use of General Fund Unrestricted Fund balance and the use of one-time revenues to help protect the fiscal health and stability of the County. Available Unrestricted General Fund balance shall be determined by excluding Unrestricted Fund balances that have been Committed.

A portion of Unrestricted General Fund balance shall be maintained as a reserve (General Fund Reserve) at a minimum of two months of regular General Fund operating expenditures (which is the equivalent of 16.7% of regular General Fund operating expenditures). The General Fund Reserve will protect the County against expenditure and revenue volatility, natural disasters and other unforeseen emergencies, economic downturns, unfunded pension liabilities, and aging infrastructure.

Appropriation of the General Fund Reserve minimum balance requires at least one of the following criteria to be met:

(1) An unanticipated revenue shortfall or expenditure increase where total expenditures exceeds total revenues.

(2) A legally declared emergency as defined in Government Code Section 29127.

(3) To absorb unforeseen changes in pension liability, including changes in the assumed rate of return, market losses,

to maintain or reduce the unfunded pension liability, or other related changes as recommended by the Chief Administrative Officer (CAO).

(4) To help mitigate risk due to maintaining aging infrastructure including capital improvements, new construction, or

other recommendations made by the CAO.

(5) To the extent reserves are available, a recommendation made by the CAO to promote the long-term fiscal health

and stability of the County.

Furthermore, all appropriation of the General Fund Reserve minimum balance and/or transfers from the General Fund Reserve appropriation, shall require a 4/5th vote of the Board of Supervisors.

To the extent that available Unrestricted General Fund balance is available in excess of General Fund Reserve minimum balance, the CAO or any Supervisor may recommend the appropriation or specific designation of the available balance for one-time uses. These recommendations may appear in the CAO Recommended Operational Plan or as an agenda item for a regularly scheduled meeting of the Board of Supervisors.

(b) Available Unrestricted General Fund balance in excess of the General Fund Reserve minimum upon the effective date of the ordinance adding this subdivision shall be known as the "Unlocked Reserves".

(1) Appropriation of the Unlocked Reserves requires at least one of the following criteria to be met:

(A) A reduction in total federal or total state revenue allocations to the County from the prior fiscal year.

(B) Mitigation of local impacts of a recession as recognized by either: (i) two consecutive quarters of negative national gross domestic product growth as reported by the U.S. Bureau of Economic Analysis or, (ii) a determination of a national recession by the National Bureau of Economic Research.

(C) Funding for time-sensitive operational expenditures as recommended by the CAO through the budget process in

alignment with the County's Strategic Plan.

(D) Funding for additional reserve minimum requirements as needed and as recommended by the CAO.

(2) No more than twenty five percent (25%) of the Unlocked Reserves, as calculated at the time this subdivision

becomes effective, may be appropriated in any single fiscal year.

(3) This subdivision shall not restrict use of Unrestricted General Fund balance recognized in the 2025-26 or

subsequent fiscal years.

(Added by Ord. No. 10400 (N.S.), effective 1-14-16; amended by Ord. No. 10509 (N.S.), effective 1-4-18; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. No. 10955 (N.S.), effective 10-9-25)

FUND BALANCE.

From time to time, fund balance may be committed by the Board of Supervisors and/or assigned by the CAO for specific purposes. A commitment requires formal board action to establish, change or cancel while an assignment may be established, changed or cancelled by the CAO. Changing or cancelling a commitment or assignment of fund balance shall not be approved if such action would result in increased and/or unfunded costs or liabilities such as those required to fulfill existing contractual obligations or to identify alternative funding sources for the original Commitment or Assignment purpose or if such action would jeopardize the long term fiscal sustainability of the County. With the exception of fund balance commitments established because of restrictions on certain revenues, such commitments and/or assignments shall not be approved if they would result in the amount of the General Fund Reserve falling below the minimum required balance.

(Added by Ord. No. 10400 (N.S.), effective 1-14-16; amended by Ord. No. 10509 (N.S.), effective 1-4-18; amended by Ord. No. 10635 (N.S.), effective 12-19-19)

BALANCE.

In the event that the General Fund Reserve falls below the minimum required balance, the CAO shall present a plan to the Board of Supervisors for restoration of the targeted levels. The plan should restore balances to targeted levels within one (1) to three (3) years, depending on the use, reasons for use, and severity of the event. In the event that the General Fund Reserve is used to serve as a short-term financing bridge, the plan shall include mitigation of long-term structural budgetary imbalances by aligning ongoing expenditures to ongoing revenues.

(Added by Ord. No. 10509 (N.S.), effective 1-4-18; amended by Ord. No. 10635 (N.S.), effective 12-19-19)

All fund balances, including the General Fund Reserve, shall be recognized as a one-time funding source, and all appropriations supported by fund balances should be appropriated for one-time uses or in conjunction with a long-term financial plan to cover short-term expenditure increases or revenue shortfalls to prevent budgetary imbalances.

In general, fund balance is established when assets are greater than liabilities at the end of a year. In practice, fund balance can be generated when temporary one-time revenues exceed expenditures in any year. One-time resources may include grants, revenue from the sale of assets, one-time expenditure savings, and revenue sources which may be available for more than one year but are either non-recurring or will be required to address future expenditure growth that is anticipated to exceed future revenue growth. One-time expenditures may include the following: program startup costs, short- term expenditure increases or revenue shortfalls to prevent budgetary imbalances, early debt retirement, capital costs, or other one-time expenditures as recommended by the CAO.

(Added by Ord. No. 10509 (N.S.), effective 1-4-18; amended by Ord. No. 10635 (N.S.), effective 12-19-19)

(a) The County shall invest one-time over-realized general purpose revenue generated by greater-than-anticipated assessed value growth to restore the General Fund Reserve to the minimum required balance. If the General Fund Reserve minimum required balance is satisfied, the County shall invest one-time over-realized general purpose revenue generated by greater-than-anticipated assessed value growth to accelerate payment of pension unfunded actuarial accrued liability.

(b) The Debt Advisory Committee, as established by the Chief Administrative Officer, shall provide direct oversight on long-term financings and the portfolio of the County's long-term obligations excluding un-securitized leases and/or loans for permanent road divisions as authorized by Board of Supervisors policy. The Debt Advisory Committee shall assess the ability of the County to repay the obligation, identify the funding source of repayment, evaluate the impact of the ongoing obligation on the current budget and future budgets, assess the maintenance and operational requirements of the project to be financed, and consider the impact on the County's credit rating.

(c) Long-Term Obligations shall not be used to finance current operations or for recurring needs.

(d) Annual principal and interest payments on Long-Term Obligations of the General Fund shall not exceed 5% of General Fund revenue.

(Added by Ord. No. 10523 (N.S.), effective 4-12-18; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. No. 10922 (N.S.), effective 11-21-24)

SEC. 114. ASSISTANT CHIEF ADMINISTRATIVE OFFICER/CHIEF FINANCIAL OFFICER TO FILE BUDGET ESTIMATES WITH CHIEF ADMINISTRATIVE OFFICER.

On or about the fourth week of May of each year the Assistant Chief Administrative Officer/ Chief Financial Officer shall file with the Chief Administrative Officer who in turn shall file with the Board, a copy of the tabulation of the budget estimates of proposed expenditures and anticipated revenue for each office, department, institution, district, board and commission for the next ensuing fiscal year, as required by the provisions of Section 29062 of the Government Code.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; amended by Ord. No. 6272 (N.S.), effective 5-20-82; amended by Ord. No. 9629 (N.S.), effective 4-15-04; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10315 (N.S.), effective 2-6-14; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. 10916 (N.S.), effective 10-10-24; amended by Ord. No. 10922 (N.S.), effective 11-21-24; amended by Ord. No. 10992 (N.S.), effective 6-12-26)

State law reference(s)--Filing required, Gov. Code, § 29062.

SEC. 115. CHIEF ADMINISTRATIVE OFFICER TO EXAMINE BUDGET ESTIMATES, HOLD HEARINGS AND SUBMIT RECOMMENDATIONS TO BOARD.

The Chief Administrative Officer, upon receipt of budget estimates filed as provided in Section113, shall, as required by Section 29061 of the Government Code, immediately proceed to examine the same and make such investigations and studies in regard thereto as they may deem necessary, and to hold hearings on said budget estimates and to examine such estimates, which said hearings and examinations shall be concluded by said Chief Administrative Officer and their recommendations with respect to said estimates submitted to the Board in May of each year.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; amended by Ord. No. 6272 (N.S.), effective 5-20-82; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. No. 10922 (N.S.), effective 11-21-24)

State law reference(s) -- Examination of budget estimates, Gov. Code, § 29061.

SEC. 116. BOARD TO EXAMINE BUDGET ESTIMATES AND APPROVE BUDGET RECOMMENDATIONS OF CHIEF ADMINISTRATIVE OFFICER.

Upon submission to the Board of Supervisors of the Assistant Chief Administrative Officer/ Chief Financial Officer's tabulation of budget estimates and the recommendations of the Chief Administrative Officer with respect thereto, said Board shall consider them and make such revisions, reductions or additions as it deems advisable. Unless the Board finds it impractical to do so, not later than the fourth week of June of each year, the Board shall approve by resolution the tabulation with the revisions, additions and changes in conformity with its judgement and conclusions as to a proper financial program for the next succeeding fiscal year in accordance with Section 29064 of the Government Code.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3-64; amended by Ord. No. 6272 (N.S.), effective 5-20-82; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10635 (N.S.), effective 12-19-19; amended by Ord. 10916 (N.S.), effective 10-10-24; amended by Ord. No. 10922 (N.S.), effective 11-21-24; amended by Ord. No. 10992 (N.S.), effective 6- 12-26)

State law reference(s) -- Notice requirements, Gov. Code, § 29064.

SEC. 117. BOARD TO HOLD HEARINGS AND TO ADOPT BUDGET.

Following submission to the Board of Supervisors of the recommendations of the Chief Administrative Officer and prior to adoption of the final County budget, said Board shall hold such hearings as may be necessary to permit any officer, board, commission or person whose estimates are recommended for increase or reduction by the Chief Administrative Officer to have a hearing thereon.

Unless the Board of Supervisors finds it impractical to so do, not later than the 20th day of June of each year it shall commence public hearings on the recommended County Budget pursuant to the provisions of Section 29080, et seq., of the Government Code. As soon as practicable after the conclusion of such public hearings, the Board shall cause to be made such revisions of, deductions from, or increases or additions to the proposed budget it deems advisable and, unless it finds it impractical to so do, not later than the last week of June the Board shall, by resolution, adopt the budget as finally determined, pursuant to the provisions of Section 29088, et seq., of the Government Code. As soon as practicable after the conclusion of such public hearings, the Board shall cause to be made such revisions of, deductions from, or increases or additions to the proposed budget it deems advisable and, unless it finds it impractical to so do, not later than the last week of June the Board shall, by resolution, adopt the budget as finally determined, pursuant to the provisions of Section 29088, et seq., of the Government Code.

(Amended by Ord. No. 2672 (N.S.), adopted 3-3- 64; amended by Ord. No. 10185 (N.S.), effective 1-5-12; amended by Ord. No. 10635 (N.S.), effective 12-19-19)

State law reference(s) -- Public hearings on proposed budget, Gov. Code, § 29080 et seq.; adoption of budget, Gov. Code, § 29088 et seq.

SEC. 118. [RESERVED.]

(Added by Ord. No. 5305 (N.S.), effective 12-14-78; repealed by Ord. No. 6080 (N.S.), effective 7-10-81)

(Added by Ord. No. 5380 (N.S.), effective 3-15-79; amended by Ord. No. 5584 (N.S.), effective 8-14-79; repealed by Ord. No. 6272 (N.S.), effective 5-20-82)

(Added by Ord. No. 5380 (N.S.), effective 3-15-79; repealed by Ord. No. 6272 (N.S.), effective 5-20-82)

SEC. 119. [RESERVED.]

(Added by Ord. No. 5380 (N.S.), effective 3-15-79; repealed by Ord. No. 6272 (N.S.), effective 5-20-82)