GENERAL SERVICES DEPARTMENT

FY19 APPROPRIATION REQUEST PRESENTATION

Edwynn Burckle, Cabinet SecretaryNovember 14, 2017

GSD FY19 RequestHigh Level Breakdown

• GSD Appropriation Request consists of three budget components:

1. Program Operating Budgets $ 37.6 million 2. Risk & Liability $ 87.1 million3. Health Benefits $ 371.7 millionTotal FY19 GSD Request $496.4 million

2

Operating Budgets

$37,597.9 Risk & Liability Funds

$87,120.2

Health Benefits

$371,696.8

8%17%

75%

Operating Budgets

Risk Funds

Benefits

Funding Sources by Percentage3

1. The Other Revenues request includes Health Benefits $371.7, RiskFunds $87.1 and Enterprise Funds $12.0 that account for 94.8% or$470.8 million.

2. The General Fund request totals 2.8% or $13.8 million, and3. The Other Transfers request (RMD & Program Support) is 2.4% or

$11.8 million of the FY19 GSD budget request.

General Fund 2.8%

Other Transfers2.4%

Other Revenues94.8%

Overall Costs Comparison by Category FY18 / FY19• The FY19 request includes the application of vacancy rate factors in all programs creating cost

savings totaling $2.1 million to address limited resources.• Reductions to the 300s are predominantly in the Risk & Liability Funds. The procurement of a new

insurance broker for blanket property insurance statewide resulted in a cost savings ofapproximately $900.0.

• The lower request in the 400s is due mainly to a moratorium in vehicle replacement and the GPSmonitoring initiative in Transportation Services. GSD on behalf of the Transportation Services Division TSD issubmitting a supplemental request to resume the GPS service for the remainder of FY18. Additionally, it will be requestingadditional budget authority to continue GPS operations on 1,919 vehicles in FY19.

• It should be noted that the FY18 budget includes the use of fund balance to fund operations inRMD. Due to its depletion, transfers into the RMD operating fund from the risk & health benefitsfunds in FY19 increased the 500s category by $1,435.0.

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$(100,000.0) $-

$100,000.0 $200,000.0 $300,000.0 $400,000.0 $500,000.0 $600,000.0

200 300 400 500 TotalFY 18 $18,740.7 $44,621.1 $427,307.5 $10,383.9 $501,053.2FY 19 $18,199.7 $43,706.0 $422,690.3 $11,818.9 $496,414.9Change (%) -2.9% -2.1% -1.1% 13.8% -0.9%

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Special Session Reductions on General Fund

• From an FY15 General Fund appropriation high of $14,237.4, the GF appropriation to GSD has been cut by more than 8 percent. GSD requests a total GF appropriation of $13.8 million for FY19 that is flat with FY18.

• The FY18 operating budget includes $994.0 necessary to assumemaintenance of the Department of Public Safety headquarters herein Santa Fe.

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$14,237,400.00 $14,137,500.00

$13,084,300.00

$13,827,800.00

$12,400,000.00

$12,600,000.00

$12,800,000.00

$13,000,000.00

$13,200,000.00

$13,400,000.00

$13,600,000.00

$13,800,000.00

$14,000,000.00

$14,200,000.00

$14,400,000.00

General Fd. Appropriation

FY2015 FY2016 FY2017 FY2018

FY2017 Special Session Reductions FY17 sweeps to Risk, Capital and Operating funds totaled $38.1 million.

• $4.6 million sweeps to operating funds will impact PS&EB, ContractualServices and Other Costs.

• $2.6 million in State Purchasing Fees Fund 28600• $2.0 million in Transportation Services - Motor Pool 36500, Surplus 36000 and Aviation

Fund 41700.

• $30.9 million sweep to public liability, state unemployment, public property andworkers’ compensation.

• $1.0 million sweep of the public building repair fund (PBRF) impacts FMD’sability to finish master planning, space use assessment and land reconciliation(continuous audit finding) efforts.

• $1.6 million sweep of the Tobacco Tax for DOH Facilities managed by FacilitiesManagement.

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GSD Operating Costs by Category • Request includes the application of vacancy rate factors of differing amounts

to PS&EB in the following programs to accommodate fiscal constraints andreductions:

• Program Support, State Printing, Risk Management and Facilities Management

• Decreases in Other Costs category:• The decrease of $2,547.2 or 14.9% under from the FY18 operating budget is

due to lack of funding to support the vehicle replacement program and theGPS monitoring system.

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48%

3%

39%

10%FY19 planned Operating Expenditures PS&EB

Contratual Services

Other Costs

Other Financing Uses

Operating Costs Comparison FY17/FY18/FY19

8

$-

$5,000.0

$10,000.0

$15,000.0

$20,000.0

$25,000.0

$30,000.0

$35,000.0

$40,000.0

$45,000.0

ProgramSupport

StatePurchasing

State Printing RMDOperating

FacilitiesManagement

TransportationServices

Total GSDOperations

FY2017 $3,868.3 $1,960.7 $1,308.7 $7,428.7 $11,519.6 $7,888.5 $33,974.5FY2018 $4,045.6 $2,263.9 $1,160.0 $8,094.2 $13,283.3 $12,023.1 $40,870.1FY2019 $3,834.3 $2,100.1 $1,665.8 $7,984.6 $13,283.3 $8,729.8 $37,597.9

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P598 Program Support - Operating• The total FY19 budget request of

$3,834.3 is $211.3 less than the FY18 operating budget.

• Reduced budget request in P598 translates into cost savings to the other 5 GSD programs.

• PS&EB vacancy rate factors range from 9.0% in ASD to 50.0% in HR for a total cost savings of $326.0.

• Cost savings in the 300s due to new annual audit contract with Moss Adams and reduced need for staff augmentation.

• The increase in the 400s is attributed mainly to increase ($159.4) in DoITISD rates.

• It should be recognized that in FY17, the Program Support budget absorbed GF reductions by decreasing its own budget to lessen the impact of reductions to the operating budgets of GF programs by reducing their Other Financing Uses (transfers out). This cost savings effort to all GSD programs continues in this request.

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$-

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

$4,000.0

$4,500.0

200 300 400 TotalFY 18 $3,017.4 $296.6 $731.6 $4,045.6FY 19 $2,691.4 $242.1 $900.8 $3,834.3

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P604 - State Purchasing• The total budget request for the State Purchasing Program (SPD) of $2,100.1 is $163.8

less overall than the FY18 operating budget.• The SPD general fund (17400) budget (GF) is flat with the FY18 operating budget.

• A 12.5% vacancy factor was applied to the 200s for 10 authorized FTE positions.

• In the fees fund (28600), the budget bureau allocated savings from a 15% vacancyfactor to nearly double the 400s budget where it is needed, but the overall request is$163.8 less than the FY18 operating budget.

• *Special Session sweep of $2.6 million from the Fees Fund will impact SPD’s ability to accomplishplanned goals and objectives with regards to SHARE Procurement Module upgrades.

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$- $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0

200 300 400 500 TotalFY 18 $615.1 $- $62.0 $11.6 $688.7FY 19 $603.5 $- $61.4 $23.8 $688.7

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SPD 174 General Fund

$- $200.0 $400.0 $600.0 $800.0

$1,000.0 $1,200.0 $1,400.0 $1,600.0

200 300 400 500 TotalFY 18 $1,320.7 $76.0 $108.5 $70.0 $1,575.2FY 19 $1,108.5 $53.0 $202.8 $47.1 $1,411.4

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SPD 286 Fees Fund

P605 State Printing & Graphics • The overall budget request of

$1,665.8 is an increase of $505.8over the FY18 operating budget.

• The significant increase is due to SP&Geffectively demonstrating its ability togenerate this level of revenue during a 60day session.

• A vacancy rate of 18.5% wasapplied to the 200s.

• State Printing continues to operatewith minimal staff.

• FY17 was the first year the fundwent solvent since FY10 withrevenues exceeding expenses by$342.7.

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$-

$200.0

$400.0

$600.0

$800.0

$1,000.0

$1,200.0

$1,400.0

$1,600.0

$1,800.0

200 300 400 500 TotalFY 18 $461.1 $- $656.7 $42.2 $1,160.0FY 19 $506.4 $100.0 $1,004.3 $55.1 $1,665.8

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P608 - Facilities Management • Total budget of $13.3 million is flat with

FY18 operating budget.• $12.6 million in General Fund is same

as FY18 operating budget.• For FY19 we are requesting authority to

use the Property Control Reserve Fund(PCRF) in the amount of $692.8 tosupplement increased costs of buildingand property insurance.

• PRC’s recent rate hikes increased utilityexpenses for buildings in the Santa Fearea.

• The Facilities Management Division(FMD) will be submitting forconsideration from the general fund, aSpecial Request in the amount of $200.0to continue the five year cyclicassessments (FCA) of state buildingsunder the control of the FMD.

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$-

$2,000.0

$4,000.0

$6,000.0

$8,000.0

$10,000.0

$12,000.0

$14,000.0

200 300 400 500 TotalFY 18 $6,703. $270.8 $6,109. $199.6 $13,283FY 19 $6,703. $270.8 $6,108. $200.0 $13,283

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P609 Transportation Services – Motor Pool / SurplusMOTOR POOL• Total budget of $7,172.1 is $3,295.6 less

than the FY18 operating budget of $10,467.7.

• The lower request is due to fund sweep during last years Special Session .

• Budgetary constraints delay the ability to replace aging vehicle fleet. Older vehicles cost more to repair and maintain. In spite of aging fleet, SAFETY is not compromised.

• The Transportation Services Division is awaiting the revenue picture to improve in order to reactivate the GPS service for the 1,919 vehicles in fleet.

SURPLUS PROPERTY• Total budget of $892.1 is $2.3 higher than

the FY18 operating budget.• Increase in 400s is due to travel rental fees.

• Surplus Property continues to experiencesuccess through donations, store frontsales and GovDeals online auction site.

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$-

$2,000.0

$4,000.0

$6,000.0

$8,000.0

$10,000.0

$12,000.0

200 300 400 500 TotalFY 18 $1,475.8 $64.6 $8,545.6 $381.7 $10,467.7FY 19 $1,482.6 $68.9 $5,377.0 $243.6 $7,172.1

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Motorpool

$-

$200.0

$400.0

$600.0

$800.0

$1,000.0

200 300 400 500 TotalFY 18 $585.4 $119.5 $151.0 $33.9 $889.8FY 19 $528.1 $120.0 $213.7 $30.3 $892.1

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Surplus Property

P609 Transportation Services – Aviation

• Total budget request of $665.6 is flat with the FY18 Operating budget.• $548.6 general funds.• $117.0 enterprise funds.

• TSD continues to focus on both pilot and aircraft safety.

• Children’s Medical Services continues to be the primary customer for the Aviation Services Bureau.

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$-

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

200 300 400 500 TotalFY 18 $290.4 $3.8 $359.8 $11.6 $665.6FY 19 $291.3 $3.8 $346.9 $23.6 $665.6

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Aviation

P606 Risk Management - Operating• Total FY19 budget request of

$7,984.6 is $109.6 less that theFY18 operating budget.

• The request also reflects a 5%vacancy rate applied in the200s to reflect efforts to fillvacancies.

• Decreases are mainly in the400s due to cost cutting effortsand 500s due to reduction ofassessments transferred toProgram Support.

• RMD operating continues to focus on providing training for ADR, CPR, OSHA, Active Shooter Awareness and Loss Prevention and Control.

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$-

$1,000.0

$2,000.0

$3,000.0

$4,000.0

$5,000.0

$6,000.0

$7,000.0

$8,000.0

$9,000.0

200 300 400 500 TotalFY 18 $4,271.1 $150.0 $378.1 $3,295.0 $8,094.2FY 19 $4,284.2 $150.0 $339.6 $3,210.8 $7,984.6

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P607 - Health Benefits16

$-

$50,000.0

$100,000.0

$150,000.0

$200,000.0

$250,000.0

$300,000.0

$350,000.0

$400,000.0

300 400 500 TotalFY 18 $21,578.0 $349,470.0 $2,148.0 $373,196.0FY 19 $21,578.0 $349,550.0 $568.8 $371,696.8

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The most significant change in the FY19 request in the Health Benefitsprogram is the reduction of Other Financing Uses 500s category forprogram support assessments. The otherwise relatively flat increase in the400s budget request for medical and prescription costs, reflects projectedflattening of overall medical costs as well as continued implementation ofcost containment measures such as wellness programs.

P799 - Risk Funds 17

$-

$10,000.0

$20,000.0

$30,000.0

$40,000.0

$50,000.0

$60,000.0

$70,000.0

$80,000.0

$90,000.0

StateUnemployment

LPBUnemployment

Public Property Public Liability Surety Bond Workers'Compensation

Total

FY 18 $6,100.0 $1,640.0 $12,449.9 $45,305.3 $480.0 $21,011.9 $86,987.1FY 19 $7,600.0 $3,090.0 $9,432.5 $45,707.3 $30.0 $21,260.4 $87,120.2

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• The request for Unemployment funds have increased in order to meet anticipated claims expenses from public and highereducation entities that cut staff to meet deficiencies experienced during recent revenue downturn.

• The request for the Public Liability funds is essentially flat over FY18. The FY18 operating budget and FY19 request are lessthan the actual $50m actual spend in FY17. Decreasing fund balance is a concern and an unanticipated “shock loss” wouldlikely require RMD to seek an Emergency BAR.

• The request for the Workers Compensation fund is again budgeted fairly flat as compared to the FY18 operating budget.The relatively small increase is necessary to accommodate a projected increase in prescription drug costs and the potentialthat the Workers Compensation Administration may increase the allowable fees charged by medical providers.

QUESTIONS?

Contact Information:Edwynn Burckle, Cabinet Secretary, 827-0033Administrative Services Division: Zella Kay Cox, Chief Financial Officer, 476-1857Budget Bureau: J. Scott Roybal, Budget Director, 827-2447 Facilities Management Division: Christopher Lee, Acting Director, 216-8837Risk Management Division: Lara White-Davis, 795-4266 State Printing & Graphics: Rob Newlin, Director, 476-1952State Purchasing Division: Larry Maxwell, Director, 827-0482 Transportation Services Division: James Chavez, Deputy Director, 660-5562