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HomeMy WebLinkAboutAgenda - 06-05-2008-ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 5, 2008 Action Agenda Item Noo SUBJECT: Discussion of Fiscal Year 2008-09 Annual Operating Budget -County Staffing and Operations DEPARTMENT: County Manager Financial Services PUBLIC HEARING: (YIN) No ATTACHMENT(S): Attachment 1. Manager Recommendations for New Staff and/or changes to Existing Staff for FY 2008- 09 Attachment 2. Positions Proposed as Part of Transition of Long-Term Temporary Funding to Meet Permanent County Staff Needs Attachment 3. Annual Operating Costs Associated With Opening of New Facilities Attachment 4. Alternative Scenarios For Possible Modifications to the FY 2008-09 Recommended Budget J INFORMATION CONTACT: Laura Blackmon, (919) 245-2300 Donna Coffey, (919) 245-2151 PURPOSE: To give the Board an opportunity to review and discuss the Manager's Recommended FY 2008-09 fiscal year budget. BACKGROUND: The County Manager released her FY 2008-09 recommended budget on May 20, 2008. Since that time, the Board has conducted two public hearings to receive residents' comments regarding the recommended budget. Tonight's work session is the first opportunity the Board has had to discuss the proposed funding plan for next fiscal year, As the Manager shared with the Board and public hearing attendees, five major guidelines were used in developing the FY 2008-09 budget: 2 ~: Balance increasing service demands and sluggish revenue growth while keeping our community affordable for all residents. ~. Balance the Board of Commissioners' historic commitment to schools as the County's top funding priority with other community needs. Provide a safe and healthy community for our growing populations including multi-cultural and economically stressed residents. -~: Fund staffing, operational and capital costs associated with new County facilities that will come on-line during the next fiscal year. ~= Offer a competitive pay and benefits package for our current permanent employees to enable them to deal with financial strains caused by rising gas, food, health care and housing costs FY 2008-09 Recommended New Staff Resources Attachments 1 and 2 of this agenda abstract provide matrixes outlining the new staff resources included in the Recommended FY 2008-09 Budget. New recommended staffing includes transitioning long-term temporary positions to permanent positions, staffing for new facilities and positions to meet service demands of our growing populations. During tonight's work session, the Board will have the opportunity to discuss staffing recommendations with the Manager and department directors. FY 2008-09 Recommended Operational Costs Associated with Opening New County Facilities During fiscal year 2008-09, eleven new County facilities will open. Attachment 3 of this agenda abstract provides a summary of annual operating costs associated with opening these facilities. The Manager plans to review these costs with the Board during tonight's work session. Departmental Budgets by Exception During tonight's work session, Commissioners will have the opportunity to ask questions of the Manager and department directors regarding recommended funding levels. The Manager recommends the Board discuss departmental budgets by exception. Appendix A of the supplemental budget data provided to the Board outlines funding for individual line items by department. FY 2008-09 Employee Pay and Compensation Plan The FY 2008-09 Recommended Budget includes the following pay and compensation plan elements for current county employees: • 2'/2% Cost of Living Adjustment for all employees effective July 1, 2008 - $1,000,036 • Enhancement of the In-Range Salary progression from 1 % for proficient and 2% for exceptional to 1 % for proficient and 3% for exceptional - $220,710 3 Maximum increase in annual health insurance premiums of 8 percent effective January 1, 2009 - $264,000 Implementation of Phase I of classification and pay plan - $225,000 o To address employees' salaries most out-of-line with the market o Full funding of Archer results recommended for July 1, 2009 During tonight's work session, the Board with have the opportunity to discuss the recommended pay and compensation plan with the Manager and Human Resources Director. Alternative Scenarios For Possible Modifications to the FY 2008-09 Recommended Budget During the FY 2008-09 budget presentation on May 20, 2008, the Board expressed desire to reduce the recommended ad valorem tax rate of $1.038 per $100 valuation to a lower rate. Attachment 4 of this agenda abstract outlines, in priority order, proposed service delivery changes for selected non-mandated areas of county government including elimination and deferral of some programs. Staff is still compiling impact statements related to elimination of the individual programs. Impact statements will be faxed and emailed to Commissioners and available on -the County's website on Tuesday, June 3, 2008. As the Board considers reducing the recommended tax rate, the following elements should be taken into consideration: The Manager's Recommended FY 2008-09 General Fund budget totals $188.3 million, an increase of 8.4% over the current year budget. ~= Total recommended funding for education, including funds for local boards of education and Orange County's Durham Technical Community College Satellite Campus, increased 8.5% from the current year approved budget while total recommended funding for county related expenditures increased 8.4%. Departmental budget requests maximized current resources to provide services for our residents. Prior to the budget coming to the Board, departmental budget requests were reduced in two main areas- temporary personnel and operating expenditures. With the exception of costs associated with new staff and new facilities, operational budgets were held to a 2% increase over the original current year operating budget. -~ Funding for education related portions, including Orange County Durham Technical Community College Campus, of the County's total General Fund equates to $92 million or 48.9% of the total $188.3 million General Fund budget. The remaining 51.1 % of the total, or $96.2 million, will cover costs of day-to-day staffing, operating, debt repayment and capital costs to provide services to our more than Orange County Recommended FY 2008-09 Budget Education Share ,'. of General Fund ! ~~ ' - "`~ ~' ~~ County Share of I ; ~. f ~ General Fund 4 123,000 residents ~= The recommended funding level for Education allows sufficient funds to provide salary increases for locally paid teachers and classified staff at the amounts included in the Governor's budget released earlier this month. Last week, legislators discussed providing lower salary increases for those personnel. ~~: Recommended salaries and benefits for the County's permanent and temporary employees make up 53% of the County's share General Fund. o $139,000 provides for transitioning long term temporary employees to permanent status. o $156,346 provides salary and benefits for six new positions to staff new County facilities o $1,070,966 provides salaries and benefits of other recommended new ad valorem supported permanent staff o $1,273,744 provides health insurance coverage for our retirees -the equivalent of just over one cent on the tax rate o $1.08 million provides workers compensation and unemployment insurance coverage for County staff o $47.3 million maintains the County's current permanent staffing levels and provides for cost of living adjustments, pay for performance and increased costs of health insurance ~: General Fund debt service in FY 2008-09 totals $26.1 million with 75% of that amount allocated to repay school related debt and the remaining 25% repaying county related debt. Repayment of debt equates to 20.5 cents of the FY 2008-09 recommended tax rate. ~: Public assistance accounts for 3.5% of the County's share of the recommended General Fund budget at a cost of $3.4 million :~ Anticipated savings in Medicaid expenditures (the largest component of our Public Assistance budget) fall short of the amounts projected by State fiscal analysts last August. Last August, State analysts projected in FY 2008-09 Orange County would realize Medicaid savings resulting from Medicaid Relief of $2.4 million. Those savings projections were based on the assumption that Orange County budgeted the full amount of Medicaid funding, $4.5 million, as recommended by the State for fiscal year 2007-08. However, during budget balancing deliberations last June, the Board anticipated that the State would provide Medicaid relief to counties, and reduced the Manager's Recommended funding level of $4.5 million to $4 million. This, coupled with recalculated Medicaid expenditures resulting from the economic slowdown, results in actual savings in FY 2008=09 of $1.65 million compared to August 2007 projections of $2.4 million. Funding for day-to-day operations of county government including fuel for vehicles, utilities for buildings, supplies for staff and clients, etc., equates to $24.5 million or 25.5% of the County's share of the General Fund. o Included in the day-to-day operations component of the budget are non-personnel related costs totaling $3 million associated with opening eleven new facilities in the upcoming fiscal year. 5 In addition to the attachments provided in this agenda item, staff has also prepared a package of data, including line item details by department and budget requests from both local Boards of Education and Durham Technical Community College, for the Board to have as supplemental information that may be useful for tonight's work session as well as upcoming work sessions on June 12 and 17. FINANCIAL IMPACT: The chart below oufilines the funding impact on the County and Schools should the Board decide to reduce the recommended tax rate. From 103.8 From 103.8 Alternative Scenarios for Possible Budget Modifications cents to 102.8 cents to cents 101.8 cents Cent Equivalent 1 2 Total Budget Cuts for County and Schools $1,271,729 $2,543,458 Total Education Share (including funding for Orange County Campus of Durham $621,875 $1,243,751 Technical Community College) (48.9% of total recommended General Fund budget) Total County Share (51.1% of total recommended General Fund budget) $649,854 $1,299,707 RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners review and discuss the Manager's Recommended FY 2008-09 budget.