Cook County Preliminary Forecast

June 18, 2018

**Embargoed until 12:01 a.m. June 19**

TONI PRECKWINKLE
President, Cook County Board of Commissioners
 FY18 Overview

**Embargoed until 12:01 a.m. June 19**

 FY2018 Total Budget: $5.2B in millions

Actuarially Recommended
Supplemental
Contribution, $353.40 , 7%

Annuity & Benefits,

$211.40 , 4%

Debt Service Fund,

$280.40 , 5%

Election Fund, $41.90 , 1%

General Fund,
Capital Programs, $447.50 $1,446.40 , 28%
, 9% Operating Funds: All funds,
predominantly financed by general
revenue, used to pay for general
expenditures of the County (payroll,
Grants, $224.70 , 4%
maintenance, leases) $3.4B
Special Purpose Funds, Health Enterprise
$157.20 , 3% Fund, $2,043.20 ,
39%

Restricted Funds: All funds, predominately financed by

Capital Funds: All funds, predominately financed by tax
revenues generated by a specific activity to support a
exempt debt, used to pay for the construction or
specific program (e.g. Grants, Special Purpose Funds).
acquisition of County Assets (Buildings, IT systems,
Restricted Funds may not be used for any other
Vehicles etc.) $447.5M
purpose. $915.6M
**Embargoed until 12:01 a.m. June 19**
 Operating Budget by Elected Office
Chief Judge
6.3%
Offices Under the
President*
$3.4B Operating Budget
7.1%
Fixed Charges
12.3% States Attorney
3.1%

Assessor
Sheriff 0.7%
14.5% Clerk of the
Circuit Court
2.9%
Treasurer
0.3%
Other
2.1% County Clerk
0.3%

Health and Hospitals Recorder of Deeds

Health and Hospitals 0.3%
System (Operating)
System (Restricted) Board of
21.4%
30.3% Review
0.3%
Cook County Board of
Commissioners
0.2%

* Offices Under the President includes an additional 2% representing the Office of the Public Defender

**Embargoed until 12:01 a.m. June 19**

 Historical FTE Count
All Funds Total Full-Time Equivalents Since 2010
26,000
25,613

25,000

23,985
24,000 23,706
23,659 23,650
23,439
Full-Time Equivalents

23,169 23,233

23,000

22,169
22,017
22,000

21,000

20,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2018 (A)

• 2018 Adopted Appropriation included 1,216 position reductions (328 layoffs)

• 2018(A) is projected year-end impact resulting from OCJ settlement
• The OCJ is expecting to reinstate 152 positions
**Embargoed until 12:01 a.m. June 19**
 FY2018 Projections

**Embargoed until 12:01 a.m. June 19**

 Preliminary 2018 Year-End Projections

2018 Year-End FY2018 $ FY2018 %

$ in Millions 2018 Appropriation Projection Variance Variance
General Fund Revenues $ 1,799.8 $ 1,808.7 $ 9.0 0.50%
General Fund Expenditures $ 1,799.8 $ 1,805.8 $ 6.0 0.33%

Health Fund Revenue $ 2,043.2 $ 2,551.2 $ 508.0 25%

Health Fund Expenditures $ 2,043.2 $ 2,553.5 $ 510.3 25%

Total Revenue $ 3,843.0 $ 4,360.0 $ 517.0 13%

Total Expenditures $ 3,843.0 $ 4,359.3 $ 516.3 13%
General Fund Gap $ - $ 3.0
Health Fund Gap $ - $ (2.3)
Operating Funds Gap $ - $ 0.6
 General Fund revenue is projected to exceed budget by $9 million
 General Fund expenditures are projected to exceed budget by $6 million
 Health Fund revenue is projected to exceed budget by $508M
 Health Fund expenditures are projected to exceed budget by $510.3 million
 Health Fund projected deficit is .01% of the Health Fund budget

Overall, the FY2018 Year-End Forecast projects a surplus of $600K in the County’s
operating funds.
**Embargoed until 12:01 a.m. June 19**
 Health Fund FY18 Year-End Estimate

FY2018 Adopted FY2018 Y/E Estimate

$2,043M $2,551M
Property Tax
Alloction, $72.7 ,
4%
Other
Reimbursements BIPA
/Transfers, $11.0 Intergovernmental
, 1% Patient Fees, Transfer, $132.3 ,
DSH Federal/State $408.3 , 16% 5%
Revenue, $156.7 ,
8% DSH Federal/State
CountyCare Revenue, $156.7 ,
Revenue, $1,210.5 , 6%
59% CountyCare
BIPA Revenue, $1,769.8 , Other
Intergovernmental 69% Reimbursements/
Transfer, $132.3 , Transfers, $11.4 ,
6% 1%

Patient Fees, Property Tax

$460.0 , 22% Alloction, $72.7 ,
3%

 The FY2018 adopted budget assumed 225,000 CountyCare members

 Membership has grown to an average of 331,000 members per month
 Anticipated CountyCare revenue exceeds budget by $508M or 25%
**Embargoed until 12:01 a.m. June 19**
 Major Drivers Influencing Year End
General Fund revenue is projected to exceed budget by $9 million
 County Treasurer revenue coming under budget primarily due to:
• Enhanced outreach efforts by the Treasurer’s Office to remind taxpayers to pay on time
• Early payments resulting from State & Local Tax deduction cap (16% collection received in
Dec); this was a one-time event, increased revenue 2017, decreased revenue for 2018
 Sales Tax revenue experiencing positive variance due stronger than expected economic growth
• Includes one-time State accelerated payment of $12M, last time received was in 2010
• Reflects decrease in Sale 2% Administrative Fee to 1.5% mid-year ($2M)
General Fund expenditures are projected to exceed budget by $6 million
 Overages related to OCJ settlement
 Additional overages related to delay in Branch Court closure
Health Fund revenue is projected to exceed budget by $508M
 Revenue increases related solely to increases in Managed Care membership growth
Health Fund expenditures are projected to exceed budget by $510.3 million
 Overages related to associated growth in Managed Care membership
 Additional impacts in Overtime and expenses related Joint Commission accreditation
 CCHHS is reviewing all accounts to determine savings to address the $2.3M 2018 projected deficit
**Embargoed until 12:01 a.m. June 19**
 FY2019
Preliminary Forecast

**Embargoed until 12:01 a.m. June 19**

 2019 Preliminary Budget Forecast
2019 Preliminary FY2019 $ FY2019 %
$ in Millions 2018 Appropriation Forecast Variance Variance
General Fund Revenues $ 1,799.8 $ 1,810.3 $ 10.5 0.59%
General Fund Expenditures $ 1,799.8 $ 1,862.6 $ 62.9 3.49%

Health Fund Revenue $ 2,043.2 $ 2,632.7 $ 589.5 29%

Health Fund Expenditures $ 2,043.2 $ 2,662.2 $ 619.0 30%

Total Revenue $ 3,843.0 $ 4,443.0 $ 600.1 16%

Total Expenditures $ 3,843.0 $ 4,524.8 $ 681.9 18%
General Fund Gap $ - $ (52.3)
Health Fund Gap $ - $ (29.5)
Operating Funds Gap $ - $ (81.8)

 General Fund revenue increases by $10.5M over FY2018 appropriations

 General Fund expenditures are projecting an increase of $63M over FY2018
 Health Fund revenue is projected to increase by $590M over FY2018 adopted
appropriations
 Health Fund expenditures are projecting an increase of $620M over FY2018

Overall, the FY2019 Forecast projects a deficit of $82M in the County’s

operating funds.
**Embargoed until 12:01 a.m. June 19**
 2019 Preliminary Budget Forecast
Historical Budget Gaps
600.0

500.0

400.0

300.0 17.7

487
200.0 200.6

315.2
267.5
315.9
100.0 198.8
152.1 168.9 174.3
97.6 81.8
0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019

Preliminary Gap SBT Repeal Impact State Impact

 FY2019 budget deficit is projected at $81.8 million across the General and Health Enterprise Funds

 Long-term financial planning reduced structural deficits by 83% since 2011

**Embargoed until 12:01 a.m. June 19**

 Long-Term Financial Planning
Health Fund-Net Surplus/(Deficit)
General Fund-Net Surplus/(Deficit) Projection ($B)
Projection ($B) $2.9
$2.1
$2.7
$2.0
$1.9 $2.5

$1.8 $2.3
3 -52 -66 -119 -184 -2 -29 -29 -37 -42
$1.7 $2.1
$1.6 $1.9
$1.5 $1.7
Revenue Expense
$1.4 Revenue Expense
$1.5
$1.3
$1.3
$1.2
$1.1
$1.1 2014 2015 2016 2017 2018 2019 2020 2021 2022
2014 2015 2016 2017 2018 2019 2020 2021 2022

Projections based upon data submitted for FY2019 preliminary forecast:

• General Fund projected FY20 deficit: $66 million
• Health Fund projected FY20 deficit: $29 million
• Total projected deficit FY20: $95 million

**Embargoed until 12:01 a.m. June 19**

 Structural Concerns
County revenues do not grow on pace with expenditures
• A significant component of revenues decline each year
$10
FY18 Projected Revenues Amount %
$0

Declining (see chart on right) $306,430,117 12.6% -$10

Millions
Failing to keep pace with -$20
$761,983,039 31.4%
inflation – (Property Tax)
-$30

Growing with economy

$1,076,589,260 44.4% -$40
(Sales, Use & Amusement)
-$50
Other Growth/Decline
patterns (Gasoline, Wheel $278,733,320 11.5% -$60
Tax etc.) FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Grand Total $2,423,735,736 100.0% County Treasurer Clerk of Circuit Court
Cigarette Tax Sheriff

Expenditures grow faster than inflation, dominated by personnel costs

• 83% of General Fund Expenditures are personnel related
• 80% of County personnel are unionized
• Health Benefits and a number of costs traditionally increase at rates above
inflation
**Embargoed until 12:01 a.m. June 19**
 2019 Preliminary Budget Forecast –
General Fund (Gap: $52.3M)

Major Revenue Variances compared to FY2018 Adopted Budget

▲ Property Tax available to the General Fund increases by $19.5M

▲ Sales Tax revenue - $36.9M

▼County Treasurer revenue - $31M

Absent Sales Tax growth, General Fund revenue would decline by $26M or 1.5%

Major Expenditure Variances compared to FY2018 Adopted Budget

▲ Salaries and Wages expenses - $29.5M

▲ Employee health benefit expenses - $10.1M

▲ Debt Service Expense - $9.4M

▲ Technology Spending - $3.2M

**Embargoed until 12:01 a.m. June 19**

 2019 Preliminary Budget Forecast –
Health Enterprise Fund (Gap: $29.5M)

Major Revenue Variances compared to FY2018 Adopted Budget

▲ Managed Care revenue - $590M

Major Expenditure Variances compared to FY2018 Adopted Budget

▲ Managed Care expenses - $519M

▲ Personnel costs - $33M

▲ Equipment and Technology maintenance and upgrades - $27.6M

**Embargoed until 12:01 a.m. June 19**

 Budget Calendar

June 19 Release Preliminary Forecast

July 12 Public hearing on 2018/2019 Preliminary Forecast

July 23 – 25 Mid-Year Budget Hearings

Aug-Sept Finalize FY2019 budget requests with Departments

October Present President’s Executive Budget Recommendation

Oct-Nov Public hearings held, amendments proposed, Board

of Commissioners votes on Appropriation Bill

**Embargoed until 12:01 a.m. June 19**