Although First 5 LA is in good fiscal health, expenditures have outpaced revenues since FY 2008-09 and the agency has had to rely on a balance of unspent funds to cover the difference. This year's expenditures on programs to ensure young children in Los Angeles County are healthy, protected and ready to succeed in school are expected to reach over $240 million - well above total revenue for the year. The balance of unspent funds expanded during First 5 LA's early years when it received over $430 million in tobacco tax revenue and programs for children and families were still being developed and initiated.
"Clearly, the current rate of spending is unsustainable," said First 5 LA Chair and Los Angeles County Supervisor Don Knabe. "We will not be able to rely on our unspent funds to support the same level of expenditures in the long term."
Currently, there are $724 million in unexpended funds, but nearly 80 percent is already committed to future year spending on various children's programs, including health, early education, and child abuse prevention programs.
The long term financial projection notes that available unspent funds are projected to be depleted by 2018 if programs currently scheduled to expire are extended. However, even if these programs end as scheduled, First 5 LA's expenditures would still exceed revenues and require dependence on a diminishing balance of unspent funds.
"Now is the time to begin making critical, strategic decisions that will determine the future direction of First 5 LA, including transitioning to a more sustainable spending portfolio- one that aligns annual spending with annual revenue and with limited reliance on unspent funds," Knabe said.
According to First 5 LA Executive Director Kim Belshe? , the long term financial projection provides an important fiscal context for the Commission's investments and focus going forward. A new Strategic Plan for 2015-20 is also scheduled to be developed this year and is intended to provide clearer direction for the agency's focus, impact, and sustainability. In addition, the First 5 LA Commission is considering revised governance guidelines to support greater discipline and accountability for decisionmaking.
Since 2001, First 5 LA has invested more than $1.2 billion in activities, services and supports for children from birth to age 5 and their families in Los Angeles County. Some of First 5 LA's major milestones include the Welcome Baby program that provides primary health prevention and parent education information to mothers of newborns, expanded access to quality preschool for more than 70,000 children in more than 300 preschools throughout LA County and an oral health program that has provided dental screenings and other services to over 53,000 preschoolage children and dental care education to over 38,000 parents and caregivers in LA County.