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HomeMy WebLinkAboutMinutes - 20071018APPROVED 1 1 1512 0 0 7 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS WITH THE BOARD OF SOCIAL SERVICES WORK SESSION October 18, 2007 5:30 p.m. The Orange County Board of Commissioners met far a Work Session with the Board of Social Services on Thursday, October 18, 2007 at 5:30 p.m. at the Government Services Center in Hillsborough, N.C. COUNTY COMMISSIONERS PRESENT: Chair Moses Carey, Jr., and Commissioners Valerie Foushee, Alice M. Gordan, Barry Jacobs, and Mike Nelson COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEY PRESENT: Geoff Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon and Clerk to the Board Donna S. Baker (all other staff members will be identified appropriately below) BOARD OF SOCIAL SERVICES MEMBERS PRESENT: Joe Robbins, Harold Russell, Patricia Garavaglia BOARD OF SOCIAL SERVICES MEMBERS ABSENT: DEPARTMENT OF SOCIAL SERVICES STAFF PRESENT: Director Nancy Coston and staff members Joyce Lee, Denise Shaffer, Lindsey Shewmaker Dennis, Yvette Smith, Sharron Hinton, and Dustin Lowell NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. The meeting was called to order at 5:54 p.m. 1. Introductions Joe Robbins said that the Board of Social Services would be sharing information tonight. He thanked the County Commissioners for being so kind to DSS over the years. He said that the Board of County Commissioners has helped dozens of DSS clients to be self-sufficient. He also thanked the County Commissioners for Commissioner Foushee, who has been a great board member for them. He said that space is a desperate need for the department, as it did not pass the Division of Social Services inspection. He works with OSHA a lot, and he said that if OSHA saw the department, it would be slapped on the wrist. Commissioner Foushee thanked Joe Robbins far these comments and said that the DSS Board works hard to support the excellent DSS staff. She invited her colleagues on the Board of County Commissioners to come and see staff working conditions at the building and the limited space. She said that the clientele and staff have increased, but the space has not. Chair Carey agreed and said that there will be discussion about this tonight. 2. Agency Overview Social Services Director Nancy Coston made a PowerPoint presentation. Social Services Board - BOCC Joint Meeting Orange County Department of Social Services Southern Human Services Richard E. Whiffed Building 2501 Homestead Rd. 300 W. Tryon Rd., PO Bax 8181 Chapel Hill, NC 27516 Hillsborough, NC 27278 (919) 968-2000 -Main Line (919) 245-2800 -Main Line (919) 644-3086 -Spanish Line • Agency Overview • Program Updates • Major Accomplishments 2006-07 • Child Care Task Force Annual Report • Space Needs • Agency Goals for 2006-07 Agency Overview • 2006-2007 Total Budget • 2006-2007 Budget Share Comparisons • Organizational Structure • Programs and Services 2006-2007 Total Budget Total Budget - $110,212,913 (Pie chart) 2006-2007 Share Comparisons Federal - 67% State - 25°~ County - 8% Organizational Structure Nancy Coston, Director Serena McPherson, Administrative Assistant Yvette Smith, IM Director Joyce Lee, Business Officer Denise Shaffer, Social Work Director Sharron Hinton, Community Services Director Lindsey Shewmaker, Management Analyst Programs and Services • Medicaid • Food Stamps • Emergency Assistance • Child Protective Services • Work First • Health Choice • Child Care Subsidy • Adoption • Foster Care • Adult Services • Skills Development Center • Adolescent Parenting • LIEAP • LINKS 3. Program Updates • Public Assistance Trends • Emergency Funds • Food and Nutrition Program • Medicaid • Medicaid Earnings and Payments • Provider Earnings • Payments • Medicaid Relief Program Updates: Public Assistance Trends -Emergency Funds Program 2005-06 Spending 2006-07 Spending 2007-08 Budget Crisis Intervention $224,861 $246,808 $152,675 Emergency Assistance $121,967 $109,454 $110,000 General Assistance $122,471 $108,649 $130,000 Total $469,298 $464,911 $392,675 Program Updates: Public Assistance Trends -Emergency Funds (pie chart} Program Updates: Public Assistance Trends - FNP (graph} Program Updates: Public Assistance Trends -Medicaid (graph) Program Updates: 2006-2007 Medicaid Provider Earnings Nursing Homes (Intermediate and Skilled} $8,185,471 Hospital Care (Inpatient and Outpatient} $130,733,858 Mental Health $12,516,625 Community Alternatives Program $5,469,714 ICF-MR Facilities $2,573,420 Physicians $30,622,952 Dentists $3,292,342 Transportation (Includes Ambulances) $1,915,865 Pharmacy $4,596,711 Other $4,272,109 Total $204,179,066 Program Updates: 2006-2007 Medicaid Provider Earnings (pie chart) Program Updates: 2006-2007 Medicaid Spending Nursing Homes $9,141,610 ICF-MR (State and Private} $7,216,156 DoctorslPhysicians $5,341,934 PharmacylMedicine $6,028,937 Hospital $18,394,671 Mental Health $12,037,971 Dental $1,520,272 Domicilia Care $3,245,793 CAP $8,123,103 Other $3,398,455 Total $74,448,902 Program Updates: 2006-2007 Medicaid Spending (graph) • Medicaid Relief The General Assembly passed a bill that will cause the State to pick up the county share of Medicaid over the next three years in exchange for ahalf-cent of sales tax revenue. The chart below shows the potential impact scenarios of this relief on Orange County. State Estimate State Estimate County County Budgeted wlRelief Estimate* Estimate Amount wlRelief $4,570,263 $3,713,317 $4,948,127 $4,020,353 $4,025,236 *The County estimates assume that the 14°~ increase in Medicaid costs from 2005-06 to 2006-07 will continue to 2007-08. Program Updates: Veterans' Services • The Veterans' Services Office has been relocated to the first floor of Richard E. Whitted Human Services Building in Hillsborough, and is now co-located with other assistance programs. • The Veterans' Services Office has been incorporated into the community services division of the agency with plans to raise community awareness of veterans' issues and available benefits 4. Major Accomplishments of 2406-2047 Awards and Competitive Grants • Awards • Equine Therapy Best Practice Award • Food and Nutrition Program Award • Competitive Grants • Strowd Roses Grant • $5,QQQ grant to purchase cribs and car seats • Real Men Rock Grant • Adolescent Parenting Program Grant • Work First Grant • Increased from $27Q,QQ0 to $SQQ,QQ0 Work First Demonstration Grant • The purpose of the grant is to increase the participation rate • The Orange County Work First Pilot contains the following components: • Comprehensive 12 week enrichment training program with 2 weeks of work experience • On the Job TraininglSubsidized Employment • Program Support Staff • Work Incentives • The Work First Demo Grant has been successful in helping move Work First participants into the work force. The All Family Participation rate increased by more than 20°~ after program implementation. Helping Foster Children Became Successful Adults • Studies have documented that the outlook for children who age out of foster care is grim. They are much more likely to: • Lack a high school diploma • Be unemployed • Become homeless • Experience mental illness • Be incarcerated • Experience drug addiction • Experience early parenthood • In an effort to provide better outcomes for these children, the Orange County DSS utilized two new initiatives in 2Q06-Q7 • Assisted Guardianship • Second Family Program Helping Foster Children Become Successful Adults: Assisted Guardianship Assisted Guardianship provides subsidy payments to a guardian to allow a child to have a permanent home when neither reunification nor adoption is possible. • Child has been in agency custody for a year, and with this provider for at least six months. • Continued placement with this caregiver is in the child's best interests, and meets the need for permanency and safety. • The caregiver is willing to assume guardianship and provide a permanent home. • The Juvenile Court approves of the plan Helping Faster Children Became Successful Adults: Second Family • The Second Family Program was established by Mike Miles and his family to foster and nurture the self-development of adolescent, foster care youth in Orange County. • Second Family provides: • Strang focus on personal, intellectual, and physical development. • Philosophy of "giving back". • Subsidy for expenses such as tutoring, music lessons, dance lessons, athletics. • Training/mentoring for development of social skills. • Development of "code of ethics" for youth. Other Accomplishments • Provided children with safe, permanent homes by completing 16 adoptions • Strengthened families by increasing counseling services to CPS families • Continued to meet service demands by providing laptops with docking stations to field staff to increase efficiency • Enabled more parents to work by providing subsidized child care for more children • Allowed more adults to remain at home through in-home aide services 5. Child Care Task Force Annual Report 2006-2007 Subsidy • Total funding increased from $3,946,852 to $4,303,412 in 2006-07 • $150,000 in county funds was designated {$70,000 from Medicaid relief) • Total number of children served increased from 1025 to 1138 • Average monthly subsidy payment was $497 • Wait time decreased from 15 months to 3 months • Currently 426 unnerved children on DSS waiting list DSS Board Recommendations Working families should wait no more than 4 months for subsidy • If wait times are longer and no funds are available, DSS Board informs BOCC • Address time frame deficiencies in Medicaid and Work First applications • Support recommendations of Child Care Task Force and assure that Board of County Commissioners is kept apprised of progress and barriers. • Seek outside funding from foundations and private organizations to support special needs of agency. • Publicize positive outcomes at agency through reports, press releases, and community presentations. • Assess and address work force stability issues Commissioner Jacobs arrived at 6:00 p.m. Commissioner Gordon arrived at 6:90 p.m. Chair Carey said that the County Commissioners will be hearing soon from the County Manager about the space issues. He said that the Social Services Department and Board should be commended far their work. The County Commissioners commended the work of the Social Services Department and the Social Services Board. Chair Carey said that the number of Spanish-speaking clients has increased and he asked about bi-lingual staff. Nancy Coston said that there are $-9 bilingual staff. Commissioner Jacobs asked about the percentage of clients that are Spanish- speaking and Nancy Coston said probably 10%. Commissioner Gordon pointed out the Child Care Task Force report and that the waiting list was reduced from 15 months to 3 months. This is a huge accomplishment. The meeting was adjourned at 7:16 p.m. Moses Carey, Jr., Chair Donna S. Baker, CMC Clerk to the Board Auditor's Responsibility • The auditor must - • Evaluate identified control deficiencies and determine whether those deficiencies, individually or in combination, are significant deficiencies or material weaknesses • Communicate, in writing, significant deficiencies and material weaknesses to management and those charged with governance • Includes items communicated in prior audits but not yet remediated During an audit of financial statements, the auditor is not required to perform procedures to identify control deficiencies - However, during the course of the audit, the auditor may become aware of deficiencies in the design or operation of the entity's internal control Identifying Control Deficiencies A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis - Design deficiency • Control is missing • Not properly designed - Operating deficiency • Control does not operate properly • Person performing control lacks authority or qualifications New Terminology • Significant Deficiency - a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with GAAP such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is mare than inconsequential will not be prevented or detected • Material Weakness - a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the entity's financial statements will not be prevented or detected Note -The term reportable condition is no longer used Key Factors to Consider • The significance of a deficiency in internal control depends on the potential for misstatement in the financial statements being audited, not just on whether a misstatement has actually occurred • Auditor needs to assess - - Likelihood - Extent • Inconsequential -the actual or potential misstatement would clearly be immaterial to the financial statements • Mare than Inconsequential -the actual or potential misstatement is less than material but more than inconsequential weaknesses, the Board could be held accountable. It is important to be aware of such situations and to make sure that these issues are addressed as soon as possible. Commissioner Foushee said that it seems that the small Finance staff may need to increase and Ken Chavious said that the mere changes in the accounting itself implies that there will be a need to add additional staff. The department has decentralized a lot of the processes to become more efficient, but the time is coming to add more staff, such as an internal auditor, and to create an audit committee, consisting of a Board member, an external representative, and staff. Doug Beelendorf said that his firm supports the idea of an audit committee. 2. Preliminary Fiscal Outlook -Fiscal Year 2008-09 and Beyond Laura Blackmon said that in past years this has been done in early winter but, but staff is working through the capital budget and will be making a presentation soon. This is a good time to talk about the fiscal outlook for next year and the budget drivers. Budget Director Donna Coffey said that the staff thought it would be a good idea to talk about the budget drivers earlier this year. She made reference to the blue booklet with graphs. She said that this time last year she never would have predicted that the State would do what it did this past summer. She said that whatever is said tonight might change significantly by the time the General Assembly is done next summer. Graph #1: Since 1998-99, Orange County has had an average annual percentage increase of 7.4% on expenditures. This equates to an $8.8 million average annual increase in the budget. In 1998, the budget was $93 million, and this year it is $173 million. Graph #2: This graph shows the dedication of the Board of County Commissioners to address education needs of the County. The Board has historically surpassed its funding target of 48.1 °~ of the total general fund going to the school systems. Graph #3: There is consistent growth in current expense expenditures going to schools (blue part of the bar graph). There has been a growth in debt service for the schools also (yellow part of the bar graph). Also, in the last couple of years, the fair funding reserve was put in place. The total funding for CHCCS and OCS is $85 million. Graph #4: There has been steady growth in per pupil funding, going from $2,040 in 1998-99 to $3,919 this year. This averages out to be just over 5°lo growth every year. Graph #5: If the trend with the per-pupil funding continues, it will cast $8.4 million just in current expense to fund the projected number of students. The student membership is anticipated to continue increasing. This year, the OCS has experienced a large increase in the number of elementary students, the majority of which are coming from the Mebane area. Graph #6: The Board approved a plan last February to issue debt, and $52 million was issued in the spring. The other plans that the Board agreed to were to debt finance the animal shelter. There is still $6.9 million in 2001 bonds that has not been sold, and the Gateway Campus has not been financed. The debt service for these is included in the debt projection numbers. The peak for debt service will be 2008-09. Commissioner Jacobs asked about the comparison of debt for the County projects versus the schools and Donna Coffey said that for 2008-09, it is $20 million for the schools and $6.5 million for the County. Graph #7: This includes preliminary projections of anticipated funding needs. Based on the assumption that the County's general fund has increased an average of 7.4°~ annually over the last ten years, by the year 2012-13, the expenditures will be at $248 million. 2008-09 Budget Drivers The list below is intended to give the Board a preliminary outlook of budget drivers that will potentially affect the County's fiscal year 2008-09 budget. Given the fact that it is very early in the budget planning process, the list is not intended to be all- inclusive at this point. Staff plans to update the Board on a regular basis between now and the time that the Manager's fiscal year 2008-09 budget is presented to the Board in mid-May 2008. Debt Service Increase Student Membership Increase Implementation of County Classification, Pay & Benefits Study Full Year Funding of Durham Technical Community College Operations Reduction in Medicaid Expenditures Reduction in Sales Tax Revenues Operational Increases Related to Opening New Schools and County Facilities including Parks Greene Tract Repayment New Landfill RegulationslGarbage Tax Solid Waste Management Planning Work Group Recommendations Development of New Transfer Station/Ancillary Facilities New Highway 57 Solid Waste Convenience Center Rogers Road Community Enhancements Value Added Shared Use Processing Facility Library Services Task Force Report Full Funding of Capital Funding Policy Discussion ensued on the uncertainty of the Medicaid relief from the State. Commissioner Jacobs asked about the status of lottery proceeds and Donna Coffey said that the County has not received a deposit this year so far. She hopes to get something by the end of October. Commissioner Gordon asked when the lottery proceeds issue would be resolved and Donna Coffey said that she hopes by the end of the calendar year. She said that budget directors across the state will have a conference in December and there should be some information. Commissioner Gordon said that it is very important for the information, when it is received, to be conveyed to the public. Commissioner Nelson asked about "garbage tax" and it was answered that this is the $2 per ton tipping fee. Commissioner Nelson asked that the correct term be used because "garbage tax" is used by the opponents of this fee, which is not a tax, that is being used to clean up old landfills in the State that have been abandoned. Graph #8: This is a historical perspective of the revenue flow over the past ten years. The reliance on property taxes has been stable over the last ten years. Graph #9: This is a historical look on the ad valorem property tax rate. One penny in 1998-99 brought in $650,000 and one penny in the current year brings in $1,248,000. Graph #10: This is the tax rate equivalent of appropriated fund balance. In 2000-01, the State took away the intangibles tax, and the County used almost 5.5 cents in fund balance to cover this. There has been no fund balance appropriated in the last few years. The fund balance last year was at 10.5°~. Graph #11: Projected sales tax revenue. Population of Orange County and Surrounding Counties: 1,449,378 in `06 Protected Population Growth for Orange County and Surrounding Counties: 2006-201 ~- 192, 095 Regional Unemployment Rate -Orange County is consistent with the region at 3.2%. (graph) Regional Employment Gains 1990-2006 (chart) Research Triangle Region's Employment Change 2006 (graph) Orange County & Surrounding Counties: Employment Change 2006 (graph) Job Growth (2001 to 2006)(graph) -Orange County had 4.5% tob growth from 2001- 2006 Job Growth In Orange County 1990-2006 (graph) -Private vs. public sectortobs Orange County Largest Job Industry(graph) - Government is Largest Orange County Job Industry(graph) Location Quotient (graph) -Orange County is higher than the national average in Leisure/Hospitality North Carolina Nigh Tech Employment (graph) NC Life Sciences Employment (graph) Single Family Permits By County 1990-06 (graph) NC Site Search Information: County Certified Sites Sites Acre Range Alamance 0 46 2-311 Chatham 0 7 17-694 Durham 0 21 8-285 Granville 2 13 5-510 Orange 0 12 1-168 Person 0 10 32-190 Wake 1 14 53-350 County Alamance Chatham Durham Granville Orange Person Wake Buildings 32 6 89 15 11 8 23 Sq. Ft. Range 5,QQ0 - 719,565 9,600 - 202,000 2,624 - 1,300,000 1,600 - 324,100 2,490 - 70,062 9,700 - 556,819 26,525 - 432,000 Avg. Cost (Acre} $45,473 $16,087 $59,563 $36,091 $62,631 $9,666 $69,812 Avg. Cost (SF} $5.66ISF $7.00/SF $8.55/SF $4.90/SF $13.OO/S F $3.50/SF $12.25/SF that in Guilford County they tried to avoid letting prime real estate turn into residential, but decided what was the best public use. Chair Carey said that the County Commissioners need to absorb a lot of this information and pick another time to give staff direction in the area of recruitment. Willie Best said that the Economic Development Commission would still like to meet with the Board of County Commissioners on November 19t". There could be a subsequent discussion after that meeting. Commissioner Nelson asked for a timeline for the Economic Development Director and Laura Blackmon said that she is interested in knowing what the Board wants to do far economic development, so that she can hire the right person. She does not want to advertise without parameters. She said that the reputation of Orange County is "no growth", and if she does not have the Board's position before she advertises, then it will be set up as a failure. Willie Best said that the strategy in Guilford was to have the CEO's of the largest corporations in the area to put in financial resources to increase the number of jabs in the area. He suggested paying for the Economic Development Director to go to the trade shows, etc. and to court businesses. Commissioner Nelson said that the reality is that economic development is critical to the community, but there is also a specific set of values as a community about haw the economic development should take place. This means that the person should came from a similar kind of community and should be non-traditional. He suggested someone who understands how Orange County has suffered because it has not done enough economic development. He said that it should be someone who is really creative and who "gets" the values in Orange County and not a Chamber of Commerce type of person. Commissioner Jacobs would like a schedule or timeline about this position. He would like to see a matrix where the County Commissioners give weight to values, different kinds of development, different kinds of strategies, etc. Chair Carey said that a matrix would make it obvious as to what is needed, and he would like to see more aggressiveness in the Economic Development Department and the strategy. There are some natural constraints in Orange County, and that could be part of the matrix. He suggested scheduling a discussion about this matrix as soon as possible after November 19t" The meeting was adjourned at 9:47 p.m. Moses Carey, Jr., Chair Donna S. Baker, CMC Clerk to the Board • Increase subsidy funds available through DSS • 2007-08 allocation is 6% above last year's allocation although county funds currently allocated are less ($70,000} • Increase monthly average number of children receiving subsidy • Current average is 708 childrenlmonth • Increase number of funding sources • 7 funding sources were utilized in 2006-07 • Study current dual subsidy system. If there are opportunities to save administrative funds to be redirected to subsidy or to improve client access, DSS Board should submit competitive bid to administer Smart Start subsidy funds. 6. Social Services Space Needs Building Space Requirements Currently Needed Needed wlGrowth Office Space 25,954 31,077 Storage Space 9,450 9,450 Meeting Space 9,518 9,518 Other Space 3,240 3,240 Total Needed 46,162 53,285 Currently Occupied 23,192 23,192 Additional Space Required 22,970 30,093 • Needed building space could consist of two separate offices or one main office with a small satellite to serve the northern and southern parts of the county. Building Options • Lease With competitive lease price, all lease or rental casts may be reimbursed as they occur at 55% Na reimbursement for upfitting • Purchase/Build • New construction costs are depreciated over 45 years at 55°l0 • Interest on financing is reimbursed at 55°k Renovate Current Facility • Major renovations are depreciated over the remaining life of the building at 55% Cost Comparisons • The following are estimated costs fora 50,000 sq. ft. space at 1 year, 10 years, 20 years and 40 years. 7. Aaency Goals 2007-2008 Continue to handle workload while assuring that quality and desired outcomes are realized in all programs. • Implement additional phases of Multiple Response System in child welfare. • Install Electronic Document Management System to increase efficiency. • Expand SA In-home services to the aged and disabled APPROVED 1 1 1512 0 0 7 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS WORK SESSION October 18, 2007 7:30 p.m. The C7range County Board of Commissioners met for a Work Session on Thursday, October 18, 2007 at 7:30 p.m. at the Link Government Services Center in Hillsborough, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Moses Carey, Jr., and Commissioners Valerie P. Foushee, Alice M. Gordon, Barry Jacobs, and Mike Nelson COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: Geof Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon, Assistant County Managers Willie Best and Gwen Harvey, and Clerk to the Board Donna Baker {All other staff members will be identified appropriately below) NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. 1. Potential Impact of Statement of Auditing Standards (SAS} 112 Laura Blackmon said that this would be a discussion about changes in the audit process. Finance Director Ken Chavious said that last year the auditor made comments about changes to came and the major one was SAS 112. The Local Government Commission issued a memo regarding these changes, which was attached to the abstract. Doug Beelendorf, Director of Audit & Accounting at McGladrey & Pullen, gave a PowerPoint presentation. This firm is conducting the current audit, which is underway. Understanding Statement on Auditing Standards No. 112, Communicating Inferno! Control Related Matters Identified in an Audit (SAS 112} Doug Beelendorf Director, Audit & Accounting When is SAS 112 Effective? • SAS 112 is effective - Whenever an auditor expresses an opinion an financial statements (including a disclaimer of opinion) For audits of financial statements for periods ending on or after December 15, 2006 Auditing Standards Board (ASB} Goals • Improve the quality of communication to the governing board and management • Require auditors to communicate these matters in writing, rather than continue to provide auditors with the option of communicating them orally • Material -the actual or potential misstatement would be material to the financial statements A Ladder Approach Mitigating Effects of Compensating Controls • Management and the auditor should also evaluate the possible mitigating effects of compensating controls - Although compensating controls mitigate the effects of a control deficiency, and may prevent the control deficiency from rising to the level of a significant deficiency or material weakness, they do nat eliminate the control deficiency Form & Content of Communication The auditor must communicate in writing to management and those charged with governance all - - Significant deficiencies - Material weaknesses - All significant deficiencies and material weaknesses communicated in previous audits that have not yet been remediated • The auditor should not issue a written communication stating that no significant deficiencies were identified during the audit because of the potential for misinterpretation Other Items of Note • The auditor cannot be a part of the client's internal control - A control deficiency cannot be mitigated by anything done by the external auditor - However, a CPA firm other than the auditor can be a part of a client's internal control • An auditor can still express a clean opinion on the financial statements even though material weaknesses in internal control are present because the auditor has performed sufficient procedures and obtained appropriate audit evidence to afford reasonable assurance that the financial statements are free from material misstatement Government Audit Quality Center {GAQC) • GAQC Alert #62 (issued 10.15.2007) - Addresses the applicability of SAS 112 to Single Audits conducted in accordance with OMB Circular A-133 • Recognizes that SAS 112 is applicable to evaluating control deficiencies in internal control over financial reporting in a financial statement audit • Recognizes that the same criteria can be used to evaluate control deficiencies in internal control over compliance in a Single Audit The AICPA is scheduled to release an Audit Risk Alert, Government Auditing Standards and Circular A-933 Audits, on November 1, 2007 Commissioner Gordon asked about the consequences for Orange County if there are deficiencies. Doug Beelendorf said that the Board of County Commissioners is responsible for the County, and if there are significant deficiencies and material Graph #12: Annual sales tax collections by component (Article 39, one cent; Articles 4Q and 42, one half cent each; and Article 44, one half cent). Donna Coffey said that she has heard that the cities and towns are pushing for some legislation to try to get a transfer tax. Graph #13: In the absence of additional local revenues, the County's dependence on ad valorem property tax as its primary revenue will increase in the future. The sales taxes are going to shrink based on what is happening currently. Graph #14: This shows how the general fund budget has looked over the last ten years. The pink line shows valuation and how this has remained stable. If the budget is growing at 7.4°~ every year and the valuation is growing at 3.9%, something has to fill the gap of how to fund the budget. In the past the answer has been to increase the tax rate. Commissioner Jacobs asked why the County would have to hold the municipalities harmless if they are trying to get a transfer tax. Geof Gledhill said that the proposition would be to give the municipalities the transfer tax and take away the hold harmless mechanism. Laura Blackman said that there have been some preliminary discussions with the schools on their budget drivers. There will be same earlier work sessions this year so that these issues can be discussed further for direction. Commissioner Jacobs made reference to school debt and said that grange County has built seven new schools in nine years, and the County took half the debt for Cedar Ridge High School. He said that essentially the County has built a school a year, and there should be some way to track what new school facilities are coming online in the school capital. He thinks that it is an incredible feat that these schools are being cranked out at this rate. 3. Orange County Economic Development Presentation Laura Blackmon said that the packet of information for this is reference material only, and she wanted the Board to see some of the incentives in N.C. Willie Best made the PowerPoint presentation. Economic Development Defined •A sustainable process of creating economic opportunity for all citizens, stimulating business investment, diversifying the public revenue base, and enhancing quality of life- Georgia Economic developers Association •The process of creating wealth by mobilizing human, financial, physical, natural, and capital resources to produce marketable goods and services.- International economic Development Council •A process by which local government and/or community based groups manage their existing resources and enter into new partnership arrangements with the private sector or with each other to create new jobs and stimulate economic activity in a well defined economic zone. -Blakely •Actions taken to improve the ability of people to more productively use capital and natural and human resources in the production of goods and services. -Whitehall Regional Population 1,82,673 in 2006 The Campus on Vilcom Chapel Hill 51,045 sq. ft. $23.00/SF Durham Centre Durham 58,592 sq. ft. $17.50/S F 200 Lucent Lane Cary 60,000 sq. ft. $18.50/S F Commissioner Nelson asked about the types of jobs the 5,000 new jobs include, and Laura Blackmon said they were private sector jobs. Commissioner Nelson said that it is the types of jobs that are important to him and not just the number. He would like for it to be diverse. Laura Blackmon said that she wants to generate discussions about this. Laura Blackman said that one of the questions is whether to make improvements in certain areas that would attract development. By decreasing the amount of time it would take for the property to be ready for use, it would make the area more competitive for economic development. Willie Best said that Orange County does get calls from companies interested in moving to Orange County, but they want to come within 30 days. Willie Best made reference to another PowerPoint presentation from the Economic Development Department, which is incorporated by reference. Orange County Property Tax Base - Property taxes in FY 2005-06 66.03°!0 of General Fund Revenues - 41 percent of all land in Orange County is in the use value program because it is used for agriculture or forestry, and is thus taxes at a reduced rate - 9.6 percent of all land in Orange County is exempt from ad valorem taxes Top Ten Orange County Employers 1. UNC-Chapel Hill - 11,000 2. UNC Hospitals - 6,956 3. Chapel Hill-Carrbora City Schools - 1,573 4. Blue Cross & Blue Shield -1,612 5. Orange County Schools - 1,031 6. Orange County Government - 963 7. Town of Chapel Hill - 678 8. General Electric - 501 9. A Southern Season - 501 10. Sports Endeavors - 387 Willie Best said that this gives the Board some opportunities to discuss economic development and what type of jobs Orange County is looking for. He asked the Board what types of businesses an Economic Development Director should look for. He said