HomeMy WebLinkAboutAgenda - 02-16-2016 - 8-c - FY2015-16 Second Quarter General Fund and Enterprise Funds Financial Report 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 16, 2016
Action Agenda
Item No. 8-c
SUBJECT: FY2015-16 Second Quarter General Fund and Enterprise Funds Financial
Report
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y/N) No
Services
ATTACHMENT(S): INFORMATION CONTACT:
1. Narrative; including Revenue and Gary Donaldson, (919) 245-2453
Expenditure Tables Paul Laughton, (919) 245-2152
2. NC State 2016 Economic Outlook
3. Powerpoint Presentation
PURPOSE: To receive a Second Quarter General Fund and Enterprise Funds summary
Financial Report for the period of July 1, 2015 — December 31, 2015.
BACKGROUND: As part of meeting the periodic financial reporting requirements and providing
timely information in regards to the financial status of the County, staff has developed financial
information related to the FY2015-16 Second Quarter General Fund and Enterprise Funds.
FINANCIAL IMPACT: There is no financial impact in receiving this FY2015-16 Second Quarter
Financial Report.
SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated
with this item.
RECOMMENDATION(S): The Manager recommends that the Board receive the FY 2015-16
Second Quarter Financial Report and provide staff with feedback.
Attachment 1 2
'RANGL. COUNTY
NOR! t..t t:AR()i.JNA..
FINANCE and ADMINISTRATIVE SERVICES
Gary Donaldson,CTP,Chief Financial Officer I gdonaldson @orangecountync.gov I 200 S.Cameron Street, Hillsborough, NC 27278 1 919.245.2151
MEMORANDUM
To: Board of County Commissioners
From: Gary Donaldson, Chief Financial Officer
Date: February 16, 2016
Re: Second Quarter FY2015-16 Financial Report-Period Ending December 31, 2015
The Second Quarter FY2015-16 report represents the Department of Finance and Administrative Services commitment to
providing important financial reporting to you, the County Manager, and our Residents.
The Major Orange County Operating funds are:
• General Fund
• Enterprise Funds (Solid Waste Fund and Sportsplex Fund)
The quarterly report is presented with a detailed comparison of FY2015-16 Budget versus Actual and FY2014-15 Budget
versus Actual indicating year to date revenues and expenditures performance. The primary goal of this quarterly report is
to communicate a concise financial status of the County's major operating funds.Your input and feedback is appreciated,
as enhancements are made to our quarterly financial reporting.
A 2016 Economic Outlook Report by Dr. Michael Walden of NC State University is included to complement this
quarterly financial report.
General Fund Performance
The FY2015-16 General Fund performance is consistent with historical performance. Unlike the first three months of the
County's fiscal year,where expenditures normally exceed revenues due to the timing of Property Tax revenues which are
due September 1,the second quarter revenues normally exceed expenditures due to the collection of a large majority of
Property Tax revenues by December 31, 2015. The County's cash flow and ability to cover expenditures during the first
quarter is attributed to a strong balance sheet.
General Fund Revenues
Second quarter FY2015-16 General Fund revenues total$137.7 million or 65.3% of budgeted revenues,which is
consistent with 2Q FY2014-15 total of$134.5 million or 66.1%% of budgeted revenues. This slight decrease of 0.8%is
Orange COW ui y Governmevut www.orangecountync.gov I 919.732.8181
3
mostly attributed to a decrease in Intergovernmental revenue, and more specifically, the timing of the receipt of Child
Support Services and Department of Social Services Federal intergovernmental revenues.
Summary of Major General Fund Revenues
FY2015-16 FY2015-16 YTD% FY2014-15 FY2014-15 YTD%
Category Original Budget Revised Budget YID Actual Collected Category Original Budget Revised Budget YTD Actual Collected
Property Tax $ 147,551,332 $ 147,551,332 $120,454,187 81.6% Property Tax 145,714,650 $ 145,714,650 $117,523,829 80.7%
Local Option Sales Tax 20,652,132 20,652,132 4,321,358 20.9% Local Option Sales Tax 19,001,962 19,001,962 3,943,843 20.8%
Licenses and Permits 313,000 313,000 77,552 24.8% Licenses and Permits 313,000 313,000 83,166 26.6%
Charges for Services 10,766,030 10,807,314 4,602,324 42.6% Charges for Services 9,799,005 9,866,868 4,499,294 45.6%
Intergovernmental 15,000,278 18,524,600 7,602,005 41.0% Intergovernmental 13,575,486 16,354,491 7,967,007 48.7%
Transfers from Other Funds 1,052,600 1,052,600 - 0.0% Transfers from Other Funds 1,052,600 1,052,600 - 0.0%
Investment Earnings 52,500 52,500 5,656 10.8% Investment Earnings 105,000 105,000 3,726 3.5%
Miscellaneous 737,468 972,934 645,499 66.3% Miscellaneous 798,065 934,769 520,650 55.7%
Fund Balance Appropriation 10,650,770 10,826,066 - 0.0% Fund Balance Appropriation 10,068,343 10,150,647 - 0.0%
General Fund Revenues 206,776,110 210,752,478 137,708,580 65.3% General Fund Revenues 200,428,111 203,493,987 $134,541,516 66.1%
Property Tax Revenues
2Q FY2015-16 Property Tax revenues total$120.4 million or 81.6% of budgeted revenues,which is above the 2Q
FY2014-15 total of$117.5 million or 80.7% of budgeted revenues,with actual collections in FY2015-16 more than
FY2014-2015 collections in the second quarter by$2.9 million. It is important to note that Property Tax revenues are due
September 1,with interest and penalties accruing January 2016. The billing versus collection rate is projected to be in the
high 90 percentile by January 31. The tax office annual billing versus collection rate is 99%. Property Tax budgeted
revenues accounts for 71% of the total General Fund revenue budget.
Local Option Sales Tax Revenues
2Q FY2015-16 revenues total$4.3 million or 20.9% of budgeted revenues,which is $400,000 above the 2Q FY2014-15
Sales Tax revenues of$3.9 million or 20.8%. This reflects three months of actual collections due to the timing of receipts
from the North Carolina Department of Revenue. The local government sales tax distributions in any given month reflect
actual sales made up to three months prior. For example,August collections reflect July vendor sales,which are
processed and allocated in September,with a local government distribution made on or before October 20. The October
payment was the first month's sales tax distribution allocated to the July-June fiscal year. The December 2016
distribution, as historically is the case,includes a large number of calendar year end refunds,which results in significantly
lower net Sales Tax revenues.
The North Carolina Department of Revenue administers the following monthly disbursement of local option sales taxes
recorded in the County's General Fund:
• Article 39 (one-cent) -authorized in 1971, and is currently allocated on a point of delivery basis.
• Article 40 (half-cent) -authorized in 1983, and is currently allocated on a per capita basis.
• Article 42 (half-cent) -authorized in 1986, and is currently allocated on a point of delivery basis.
Orange County Goveirnment, I www.orangecountync.gov I 919.732.8181
4
Charges for Services
2Q FY2015-16 Charges for Services total$4.6 million or 42.6% of budgeted revenues, as compared with 2Q FY2014-15
total of$4.5 million or 45.6% of budgeted revenues with actual collections in FY2015-16 exceeding FY2014-15
collections in the second quarter by$103,030. This source of income is comprised of various departmental fees for
services including Planning and Inspections, Environment,Agriculture,Parks and Recreation,Aging, Sheriff's Office,
Emergency Services, and Register of Deeds. Register of Deeds revenues are approximately 9.4%higher as compared to
the second quarter of FY2014-15, the department has received approximately$108,000 more in revenue as compared to
the same period in FY2014-15. This department has collected approximately 60%of its annual budgeted revenues.
Intergovernmental Revenues
2Q FY2015-16 Intergovernmental revenues total$7.6 million or 41.0% of budgeted revenues, as compared to 2Q
FY2014-15 total of revenues of$7.9 million or 48.7% of budgeted revenues. This source of income includes revenue
received from the Federal, State, and other local governments. Examples of revenue from local governments include
contracts with the Towns of Chapel Hill, Carrboro, and Hillsborough for animal control services, and tax collection
services. As reported in the 1Q FY2015-16 report, the second quarter variance reflects only a timing variance of receipts
and is not a performance variance. Timing in receipt of Federal Medicaid and Work First revenues explains the majority
of the variance for the Department of Social Services. The Department of Social Services (DSS)receives 64% of the
annual budgeted revenues.
General Fund Expenditures
2Q FY2015-16 General Fund expenditures total$95.3 million or 45.0% of budgeted expenditures, as compared with 2Q
FY2014-15 total expenditures of$91.1 million or 44.6% of budgeted expenditures,with actual expenditures in FY2015-
16 more than FY2014-15 expenditures by$4.2 million. The overall General fund increase of 0.4%in 2QFY2015-16 is
attributed to increased expenditures of approximately$1.0 million in Current Expense funding for Schools, increased
expenditures and/or encumbrances in Emergency Services and Sheriff Department, and increased expenditures and/or
encumbrances in DSS and Health Department(see Functional Leadership Teams below for more detail).
Summary of Major General Fund Expenditures
FY2015-16 FY2015-16 YTD% FY2014-15 FY2014-15 YTD
Category Original Budget Revised Budget YTD Actual Expended Category Original Budget Revised Budget YTD Actual Expended
Community Services $ 10,568,530 $ 10,730,406 $ 4,876,052 45.4% Community Services 9,706,823 $ 9,881,248 $ 4,444,971 45.0%
General Government 7,761,418 7,834,873 3,620,299 46.2% General Government 7,052,986 7,148,018 3,365,899 47.1%
Public Safety 22,915,823 23,134,660 11,161,607 48.2% Public Safety 22,021,055 22,167,858 9,642,227 43.5%
Human Services 33,941,247 37,606,119 17,935,939 47.7% Human Services 32,016,307 34,446,023 16,922,393 49.1%
Education 78,837,341 78,837,341 39,046,174 49.5% Education 76,847,414 76,847,414 37,929,707 49.4%
Support Services 11,726,879 11,995,293 6,695,003 55.8% Support Services 11,087,403 11,343,016 6,170,740 54.4%
Non-Departmental 41,024,872 41,880,133 12,029,303 28.7% Non-Departmental 41,696,123 42,449,708 12,682,157 29.9%
General Fund Expenditures 206,776,110 212,018,826 95,364,376 45.0% General Fund Expenditures 200,428,111 204,283,285 91,158,094 44.6%
Orange County Government I www.orangecountync.gov I 919.732.8181
5
Please note that the reporting of Budget versus Actual expenditures is reflected by the following Functional
Leadership Teams:
Community Services-Animal Services,NC Cooperative Extension, DEAPR, Economic Development,Planning and
Inspections/Orange Public Transportation.
2Q FY2015-16 General Fund expenditures total$4.8 million or 45.4%as compared with 2QFY2014-15 Community
Services expenditures of$4.4 million or 45.0%,with actual expenditures in FY2015-16 exceeding FY2014-15
expenditures by$400,000. The increase in expenditures is attributed to an increase in expenditures and/or encumbrances
in Animal Services due to department having fewer vacancies in the current fiscal year, a modest increase in Operating
expenditures, and an increase in Recurring Capital due to the construction of an outdoor dog exercise area in the current
fiscal year; increases in Planning/Inspections Department and Orange Public Transportation(OPT) due to increases in
additional OPT staff approved by the Board during the FY2015-16 Budget process) and an increase in the Contract
Services account within the Operating expenditures; and increases in Economic Development primarily due to being fully
staffed in FY2015-16.
General Government- Board of Elections, Clerk to the Board, County Attorney, County Manager,Register of Deeds
and Tax Administration
2Q FY2015-16 General Government expenditures total$3.6 million or 46.2% of budgeted expenditures, as compared
with 2Q FY2014-15 total of$3.4 million or 47.1% of budgeted expenditures. The increase in expenditures are mostly
attributed to an increase in the County Manager's Office due to the transfer of the Pre-Trial Services and Drug Treatment
Court programs from Social Services to the Manager's Office in FY2015-16.
Public Safety—Courts, Emergency Services, and Sheriff's Office
2Q FY2015-16 Public Safety expenditures total$11.1 million or 48.2% of budgeted expenditures, as compared with 2Q
FY2014-15 total of$9.6 million or 43.5% of budgeted expenditures. The Department of Emergency Services expenditures
are 5.5%higher than during the second quarter of FY2014-15. This EMS increase is attributed to an increase in Personnel
Services accounts (due to having fewer vacancies within the Communications division,but still requiring significant
Temporary Personnel hours to ensure proper coverage)and an increase in the Contract Services and an increase in the
Medical Supplies operating accounts. EMS remains within budget and assuming a constant spending rate,the department
is projected to end within budget. The Sheriff's Office expenditures are 4.1%higher than during the second quarter of
FY2014-15, and are mostly attributed to the purchase of recurring capital items, such as a firearms training simulator,
mobile field units, and firearms.
Human Services—Department on Aging, Child Support, Housing, Human Rights, and Community Development,
Library,Public Health and Social Services
2Q FY2015-16 Human Services expenditures total$17.9 million or 47.7% of budgeted expenditures, as compared with
2Q FY2014-15 total of$16.9 million or 49.1%of budgeted expenditures. The Department of Social Services comprises
more than 50% of the human services budget, and is the primary driver of the second quarter expenditure increase,
attributed to the renovations to the former Dollar Tree site, child day care, and less staff vacancies, although the percent of
budget comparison is lower by 1.4%. The overall percent decrease in the function is also attributed to the OPC Area
Program and Library Municipal non-departmental payment timing variance. The Health Department expenditures are
2.6%higher than during the second quarter of FY2014-15. This increase is primarily due to an increase in the Personnel
Services accounts, due to fewer vacancies within the department and an increase in the amount of Non-Permanent
Orange County Government I www.orangecountync.gov I 919.732.8181
6
Personnel expenditures. Additionally, the Health Department has an increase of 3.8%within its Operating accounts,
primarily driven by the Contract Services account and the inclusion of the Family Success Alliance account in FY2015-16
(no funds had been expended in this account through the first 2 quarters of FY2014-15).
Support Services-Asset Management Services, Community Relations,Finance, Human Resources, and Information
Technology
2Q FY2015-16 Support Services expenditures total$6.7 million or 55.8%of budgeted expenditures, as compared with 2Q
FY2014-15 total of$6.1 million or 54.4% of budgeted expenditures. The year to date rate of expenditures are above the
50% straight-line due to an increase in Asset Management Services of 3.6% and an increase in Information Technology of
5.3%. The increase in Asset Management is attributed to Personnel Services accounts, due to having fewer vacancies, and
increases in the Vehicle Maintenance, Building Repair,Facility Care, Contract Services, and Electricity Operating
accounts. The increase in Information Technology is attributed to Personnel Services accounts, due to fewer vacancies
within the department, and an increase in IT Equipment capital outlay.
Education
2Q FY2015-16 Education expenditures total$39.0 million or 49.5% of budgeted expenditures, as compared with 2Q
FY2014-15 total of$37.9 million or 49.1% of budgeted expenditures. The FY2015-16 Education budget was increased by
$1.9 million over the prior year's budget, and the County has remitted amounts commensurate with the prior year. The
Education expenditures are comprised of Current Expenses to the Chapel Hill-Carrboro City School District and Orange
County School District. Current Expenses of$37.0 million or 50% of budgeted expenditures was remitted to the school
districts through the second quarter; this was $975,166 more than the same period in FY2014-15. The remaining
Education budget pertains to Fair Funding, Recurring Capital, and Other Related County Support, specifically support to
Durham Technical College(Orange County campus).
Non-Departmental
2Q FY2015-16 Non-Departmental expenditures total$12.0 million or 28.7% of budgeted expenditures, as compared with
2Q FY2014-15 total of$12.6 million or 29.9% of budgeted expenditures. The second quarter expenditures are 1.2%lower
than the same period in 2Q FY2014-15 due to the timing of debt service payments.
In summary, 2Q FY2015-16 General Fund Revenues and Expenditures are in line with the adopted FY2015-16 General
Fund Budget; and there are no material areas of concern at the mid-year point.
Enterprise Funds Performance
Solid Waste Fund
2Q FY2015-16 Solid Waste Fund performance is in line with the adopted FY2015-16 budget. Second quarter revenues
are$7.1 million or 62.4% of budgeted revenues and expenses are $6.7 million or 54.3% of budgeted expenses. This
compares with FY2014-15 second quarter revenues of$5.2 million or 39.9% of budgeted revenues and expenses of$8.9
million or 56% of budgeted expenses. The FY2014-15 higher expenses were attributed to landfill closure costs,while the
increase in revenues in FY2015-16 is attributed to increased collections from the$107 Solid Waste Programs fee.
Sportsplex Fund
Orange County Government I www.orangecountync.gov I 919.732.8181
7
2Q FY2015-16 Sportsplex Fund performance is consistent with the adopted FY2015-16 budget. The revenue stream is
comprised of Ice Rink-34% of budgeted revenues, Membership and Fitness-32% of budgeted revenues,with the
remaining revenues comprised primarily of Aquatic and Kidsplex. Second quarter revenues are$1.6 million or 50.7% of
budgeted revenues and expenses are$1.7 million or 49.8% of expenses. This compares with FY2014-15 second quarter
revenues of$1.6 million or 52.9% of budgeted revenues and expenses of$2.5 million or 45.2% of budgeted expenses.
The increase in expenses in FY2014-15 was attributed to the lobby and locker room renovations project.
Enclosures
Orange County Government I www.orangecountync.gov I 919.732.8181
8
Revenue by Category(2nd Quarter)
Summary-General Fund
FY2015-16 FY2014-15
YTD% YTD%
Original Budget Revised Budget YTD Actual Collected Original Budget Revised Budget YTD Actual Collected
Property Taxes
Property Taxes 136,413,322 136,413,322 115,361,560 84.6% 135,734,649 135,734,649 111,545,148 82.2%
Motor Vehicles 8,953,010 8,953,010 4,127,977 46.1% 8,102,271 8,102,271 4,889,911 60.4%
Gross Receipts 55,000 55,000 35,061 63.7% 45,000 45,000 38,384 85.3%
Delinquent Taxes 1,150,000 1,150,000 682,056 59.3% 994,130 994,130 715,712 72.0%
Interest on Delinquent Taxes 450,000 450,000 122,140 27.1% 350,000 350,000 172,857 49.4%
Late List Penalties 75,000 75,000 33,931 45.2% 60,000 60,000 67,614 112.7%
Animal Taxes 200,000 200,000 91,461 45.7% 205,000 205,000 94,204 46.0%
Beer and Wine 255,000 255,000 0 0.0% 223,600 223,600 0 0.0%
Property Taxes Total 147,551,332 147,551,332 120,454,187 81.6% 145,714,650 145,714,650 117,523,829 80.7%
Sales Tax
Article 39 One Cent 9,429,650 9,429,650 1,754,841 18.6% 8,667,512 8,667,512 1,566,766 18.1%
Article 40 Half Cent 6,489,632 6,489,632 1,681,343 25.9% 5,994,861 5,994,861 1,584,323 26.4%
Article 42 Half Cent 4,732,850 4,732,850 885,174 18.7% 4,339,589 4,339,589 792,754 18.3%
Sales Tax Total 20,652,132 20,652,132 4,321,358 20.9% 19,001,962 19,001,962 3,943,843 20.8%
Licenses and Permits
Privilege License 13,000 13,000 1,672 12.9% 13,000 13,000 2,521 19.4%
Franchise Fee 300,000 300,000 75,880 25.3% 300,000 300,000 80,645 26.9%
Licenses and Permits Total 313,000 313,000 77,552 24.8% 313,000 313,000 83,166 26.6%
Charges for Services
Aging 67,100 90,100 52,409 58.2% 67,100 95,068 49,583 52.2%
Animal Services 193,100 194,300 90,761 46.7% 197,800 197,800 97,338 49.2%
Asset Management 1,156 1,156 1,018 88.0% 600 600 175 29.2%
Board Of Elections 54,495 54,495 5,814 10.7% 100 100 113 113.3%
Child Support 1,100 1,100 625 56.8% 1,100 1,100 896 81.5%
Cooperative Extension 20,000 31,000 33,850 109.2% 20,000 26,180 15,700 60.0%
DEAPR 317,823 317,823 161,370 50.8% 279,858 279,858 162,005 57.9%
Emergency Services 2,490,215 2,490,215 1,161,605 46.6% 2,240,215 2,240,215 1,120,021 50.0%
General Revenue 472,798 472,798 0 0.0% 472,798 472,798 0 0.0%
Health 1,588,127 1,594,211 754,295 47.3% 1,364,166 1,385,666 652,404 47.1%
Library 29,850 29,850 11,312 37.9% 29,850 29,850 11,301 37.9%
OPT 114,500 114,500 31,612 27.6% 96,500 96,500 41,012 42.5%
Planning&Inspections 1,065,865 1,065,865 676,702 63.5% 707,330 719,545 597,558 83.0%
Register Of Deeds 1,355,500 1,355,500 805,568 59.4% 1,393,687 1,393,687 697,295 50.0%
Sheriff 2,615,700 2,615,700 680,642 26.0% 2,591,700 2,591,700 845,206 32.6%
Tax 378,701 378,701 134,741 35.6% 336,201 336,201 208,687 62.1%
Charges for Services Total 10,766,030 10,807,314 4,602,324 42.6% 9,799,005 9,866,868 4,499,294 45.6%
9
Revenue by Category(2nd Quarter)
Summary-General Fund
FY2015-16 FY2014-15
YTD% YTD%
Original Budget Revised Budget YTD Actual Collected Original Budget Revised Budget YTD Actual Collected
Intergovernmental
Aging 532,367 578,345 204,120 35.3% 541,480 583,256 192,956 33.1%
Animal Services 218,218 218,218 92,284 42.3% 200493 200493 84,603 42.2%
Child Support 1,318,075 1,318,075 470,542 35.7% 1,270,000 1,270,000 638,159 50.2%
County Debt Svc-Revs 0 0 0 0.0% 42,991 2,991 0 0.0%
DEAPR 132,838 135,728 28,135 20.7% 126,717 130,522 3,805 2.9%
Emergency Services 0 1,101 1,101 100.0% 0 0 0 100.0%
General Revenue 400,000 400,000 200,000 50.0% 400,000 400,000 200,000 50.0%
Health 973,772 1,054,763 507,583 48.1% 871,740 918,628 452,855 49.3%
Information Technologies 19,645 19,645 0 0.0% 19,645 19,645 0 0.0%
Library 100,000 123,480 51,086 41.4% 100,000 101,031 54,054 53.5%
OPC Mental Health 40,000 40000 21,349 53.4% 40,000 40,000 16,478 41.2%
OPT 844,100 844,100 231,252 27.4% 611,647 611,647 349,448 57.1%
Planning&Inspections 24,024 24,024 2,823 11.8% 0 24,024 0 0.0%
Public Safety Non-Dept) 277,731 277,731 138,840 50.0% 277,731 277,731 126,090 45.4%
Lottery Proceeds 0 713,239 713,239 100.0% 0 616,517 218,775 35.5%
Sheriff 364,469 364,469 35,500 9.7% 184,469 184,469 6,501 3.5%
Social Services 9,709,839 12,366,482 4,904,149 39.7% 8,843,373 10,928,337 5,610466 51.3%
Tax 45,200 45,200 0 0.0% 45,200 45,200 12,818 28.4%
Intergovernmental Total 15,000,278 18,524,600 7,602,005 41.0% 13,575,486 16,354,491 7,967,007 48.7%
Transfers from Other Funds
Impact Fees 1,040,000 1,040,000 0 0.0% 1,040,000 1,040,000 0 0.0%
Other 12,600 12,600 0 0.0% 12,600 12,600 0 0.0%
Transfers from Other Funds
Total 1,052,600 1,052,600 0 0.0% 1,052,600 1,052,600 0 0.0%
Investment Earnings Total 52,500 52,500 5,656 10.8% 105,000 105,000 3,726 3.5%
Miscellaneous Total 737,468 972,934 645,499 66.3% 798,065 934,769 520,650 55.7%
Appropriated Fund Balance
Total 10,650,770 10,826,066 0 0.0% 10,068,343 10,150,647 0 0.0%
Total General Fund Revenue 206,776,110 210,752,478 137,708,580 65.3% 200,428,111 203,493,987 134,541,516 66.1%
10
Expenditures by Functional Leadership Team(2nd Quarter)
Summary-General Fund
FY2015-16 FY2014-15
YiD% YiD%
Original Budget Revised Budget YTD Actual* Expended Original Budget Revised Budget \TD Actual Expended
Community Services
Animal Services 1,958,791 1,983,197 940,703 47.4% 1,884,793 1,897,793 827,159 43.6%
Cooperative Extension 379,843 390,843 150,202 38.4% 367,972 374,152 159,882 42.7%
Department of Environment,Agriculture,
Parks&Recreation 3,464,888 3,522,342 1,665,565 47.3% 3,177,359 3,235,775 1,616,803 50.0%
Economic Development 515,575 519,421 257,430 49.6% 511,710 520,276 165,906 31.9%
Planning&Inspections 4,124,325 4,189,495 1,826,786 43.6% 3,639,881 3,728,145 1,609,942 43.2%
Recreation Municipal 125,108 125,108 35,365 28.3% 125,108 125,108 65,279 52.2%
Community Services Total 10,568,530 10,730,406 4,876,052 45.4% 9,706,823 9,881,248 4,444,971 45.0%
General Government
Board of County Commissioners 870,355 870,930 443,671 50.9% 830,578 833,278 415,550 49.9%
Board of Elections 1,063,148 1,063,148 367,063 34.5% 694,173 724,977 418,797 57.8%
County Attorney's Office 551,501 551,501 266,685 48.4% 541,000 541,000 239,285 44.2%
County Manager's Office 856,037 856,037 386,536 45.2% 722,580 722,580 259,739 35.9%
Register of Deeds 924,165 924,165 460,086 49.8% 903,025 903,025 450,539 49.9%
Tax Administration 3,496,212 3,569,092 1,696,259 47.5% 3,361,630 3,423,158 1,581,989 46.2%
General Government Total 7,761,418 7,834,873 3,620,299 46.2% 7,052,986 7,148,018 3,365,899 47.1%
Public Safety
Courts 90,655 90,655 29,379 32.4% 81,655 81,655 17,195 21.1%
Emergency Services 10,146,314 10,234,652 4,822,822 47.1% 9,924,769 9,987,078 4,154,492 41.6%
Sheriff 12,678,854 12,809,353 6,309,406 49.3% 12,014,631 12,099,125 5,470,541 45.2%
Public Safety Total 22,915,823 23,134,660 11,161,607 48.2% 22,021,055 22,167,858 9,642,227 43.5%
Human Services
Department of Social Services 18,153,438 21,482,330 10,645,973 49.6% 17,196,401 19,354,948 9,808,894 50.7%
Health Department 8600,516 8,776,156 4,306,680 49.1% 7,910,226 8,008,633 3,725,295 46.5%
Human Services Total 26,753,954 30,258,486 14,952,654 49.4% 25,106,627 27,363,581 13,534,189 49.5%
Education
Current Expenses 74,097,466 74,097,466 37,048,733 50.0% 72,147,134 72,147,134 36,073,567 50.0%
Fair Funding 988,000 988,000 121,503 12.3% 988,000 988,000 0 0.0%
Other Related County Support 751,875 751,875 375,938 50.0% 712,280 712,280 356,140 50.0%
Recurring Capital 3,000,000 3,000,000 1,500,000 50.0% 3,000,000 3,000,000 1,500,000 50.0%
Education Total 78,837,341 78,837,341 39,046,174 49.5% 76,847,414 76,847,414 37,929,707 49.4%
11
Expenditures by Functional Leadership Team(2nd Quarter)
Summary-General Fund
FY2015-16 FY2014-15
YiD% YiD%
Original Budget Revised Budget YTD Actual* Expended Original Budget Revised Budget \TD Actual Expended
Support Services
Asset Management Services 4,295,957 4,508,428 2,559,154 56.8% 4,135,662 4,331,917 2,305,059 53.2%
Community Relations 188,716 189,941 94,655 49.8% 186,028 194,618 89,254 45.9%
Finance&Administrative Services 3,401,850 3,418,120 1,991,298 58.3% 3,364,117 3,368,807 2,045,770 60.7%
Human Resources 945,127 951,961 388,626 40.8% 780,016 785,602 360,680 45.9%
Information Technologies 2,895,229 2,926,843 1,661,269 56.8% 2,621,580 2,662,072 1,369,977 51.5%
Support Services Total 11,726,879 11,995,293 6,695,003 55.8% 11,087,403 11,343,016 6,170,740 54.4%
Non-Departmental
Culture&Recreation 90,294 90,294 28,522 31.6% 91,374 91,374 39,487 43.2%
Community&Environment 234,425 279,960 212,316 75.8% 219,651 295,959 204,149 69.0%
General Services 1,735,518 1,735,518 981,722 56.6% 1,871,543 1,871,543 1,039,339 55.5%
Governing&Management 4,046,062 4,062,071 587,547 14.5% 5,105,948 5,124,208 602,716 11.8%
Human Services 2,462,315 2,464,837 663,807 26.9% 2,337,980 2,337,980 293,916 12.6%
Public Safety 401,052 401,052 173,611 43.3% 361,052 361,052 153,754 42.6%
Debt Service 26,913,693 26,913,693 9,381,778 34.9% 26,529,306 26,529,306 10,348,796 39.0%
Transfers to Other Funds 5,141,513 5,932,708 0 0.0% 5,179,269 5,838286 0 0.0%
Non-Departmental Total 41,024,872 41,880,133 12,029,303 28.7% 41,696,123 42,449,708 12,682,157 29.9%
Total Expenditures 199,588,817 204,671,192 92,381,091 45.1% 193,518,431 197,200,844 87,769,890 44.5%
*YlD Actuals include Encumbrances
12
Revenues and Expenses(2nd Quarter)
Summary-Solid Waste Enterprise Fund
FY2015-16 FY2014-15
YTD% YTD%
Original Budget Revised Budget YTD Actual* Expended Original Budget Revised Budget YTD Actual Expended
Revenues
Charges for Services 7,805,439 7,805,439 5,945,473 76.2% 5,264,960 5,264,960 4,125,451 78.4%
General Govt Revenue 1,840,518 1,947,218 1,048,251 53.8% 4,459,272 4,459,272 943,515 21.2%
Intergovernmental 353,000 353,000 157,106 44.5% 601,925 601,925 130,811 21.7%
Contribution from Equipment Reserves 1,362,061 1,362,061 0 0.0% 2,696,893 2,696,893 0 0.0%
Revenues Total 11,361,018 11,467,718 7,150,830 62.4% 13,023,050 13,023,050 5,199,777 39.9%
Expenses
Personnel 3,822,663 3,822,663 1,855,457 48.5% 3,558,815 3,558,815 1,607,564 45.2%
Operations 5,296,743 5,896,153 3,520,867 59.7% 5,231,847 6,027,104 4,383,416 72.7%
Recurring Capital 1,244,137 1,597,569 1,305,339 81.7% 3,268,389 5,386,503 2,935,232 54.5%
Contribution to Equipment Reserves 997,475 997,475 0 0.0% 963,999 963,999 0 0.0%
Expenses Total 11,361,018 12,313,860 6,681,663 54.3% 13,023,050 15,936,422 8,926,213 56.0%
*YTD Actuals include Encumbrances
13
Revenues and Expenses (2nd Quarter)
Summary-Sportsplex Fund
FY2015-16 FY2014-15
YTD% YTD%
Original Budget Revised Budget YTD Actual* Expended Original Budget Revised Budget YTD Actual Expended
Revenues
Charges for Services
Ice Rink 1,115,385 1,115,385 587,633 52.7% 1,126,360 1,126,360 590,402 52.4%
Aquatic 436,000 436,000 221,544 50.8% 327,400 327,400 208,264 63.6%
Kidsplex 384,010 384,010 187,537 48.8% 412,800 412,800 190,909 46.2%
Membership and Fitness 1,051,528 1,051,528 513,920 48.9% 970,300 970,300 458,043 47.2%
Other Income 183,077 183,077 96,027 52.5% 192,950 192,950 153,887 79.8%
Charges for Services Total 3,170,000 3,170,000 1,606,661 50.7% 3,029,810 3,029,810 1,601,505 52.9%
Appropriated Fund Balance Total 106,278 106,278 0 0.0% 202,926 752,926 0 0.0%
Transfer from General Fund Total 0 0 0 100.0% 376,450 376,450 0 0.0%
Revenues Total 3,276,278 3,276,278 1,606,661 49.0% 3,609,186 4,159,186 1,601,505 38.5%
Expenses
Personnel 1,177,868 1,177,868 588,517 50.0% 1,147,706 1,147,706 531,204 46.3%
Operations 2,098,410 2,120,081 987,462 46.6% 2,041,480 2,063,151 1,390,876 67.4%
Recurring Capital 0 201,094 167,230 83.2% 420,000 2,349,246 591,656 25.2%
Expenses Total 3,276,278 3,499,042 1,743,209 49.8% 3,609,186 5,560,103 2,513,736 45.2%
*YTD Actuals include Encumbrances
14
Revenues by Fund(2nd Quarter)
Summary-Other Funds
FY2015-16 FY2014-15
YTD% YTD
Original Budget Revised Budget YTD Actual* Expended Original Budget Revised Budget YTD Actual Expended
10-General Fund 206,776,110 210,720,278 137,266,350 65.1% 200,428,111 203,507,807 133,938,613 65.8%
29-Annual Grants Project Fund 163,694 132,870 46,939 35.3% 163,694 203,778 96,945 47.6%
30-Multi-Year Grant Projects Fund 14,808,163 16,122,418 11,441,788 71.0% 14,389,084 15,120,542 10,851,638 71.8%
32-Community Development Fund 15,815,909 23,167,370 21,163,586 91.4% 15,370,993 22,458,524 19,525,620 86.9%
33-Housing Fund 4,907,698 4,907,698 1,861,690 37.9% 4,569,529 4,569,529 1,902,258 41.6%
35-Emergency Telephone Fund 925,099 925,099 169,985 18.4% 857,041 857,041 234,359 27.3%
36-Revaluation Fund 0 0 0 0.0% 0 0 0 100.0%
37-Visitor's Bureau Fund 1,441,340 1,693,440 791,365 46.7% 1,503,101 1,503,101 666,359 44.3%
38-Spay/Neuter Fund 64,150 64,480 20,771 32.2% 66,350 67,616 24,501 36.2%
50-Solid Waste Enterprise Fund 11,361,018 11,467,718 7,150,830 62.4% 13,023,050 13,023,050 5,199,777 39.9%
51-Efland Sewer Operating Fund 331,930 331,930 112,665 33.9% 374,480 374,480 97,145 25.9%
53-Sportsplex Fund 3,276,278 3,276,278 1,606,661 49.0% 3,609,186 4,159,186 1,601,505 38.5%
Expenditures by Fund(2nd Quarter)
Summary-Other Funds
FY2015-16 FY2014-15
YTD% YTD
Original Budget Revised Budget YTD Actual* Expended Original Budget Revised Budget YTD Actual Expended
10-General Fund 206,776,110 212,018,826 95,364,817 45.0% 200,428,111 204,283,285 91,158,094 44.6%
29-Annual Grants Project Fund 165,770 137,011 80,804 59.0% 163,694 206,124 112,066 54.4%
30-Multi-Year Grant Projects Fund 15,245,440 16,131,203 10,806,572 67.0% 14,890,532 15,120,542 10,183,376 67.3%
32-Community Development Fund 15,273,116 23,167,370 20,832,963 89.9% 14,822,778 22,459,230 19,595,504 87.2%
33-Housing Fund 4,907,698 4,907,698 2,007,035 40.9% 4,569,529 4,569,529 1,865,464 40.8%
35-Emergency Telephone Fund 925,099 964,273 352,726 36.6% 857,041 1,064,072 442,022 41.5%
36-Revaluation Fund 0 0 0 0.0% 0 0 26 25790.0%
37-Visitor's Bureau Fund 1,441,340 1,693,440 907,112 53.6% 1,503,101 1,503,101 694,191 46.2%
38-Spay/Neuter Fund 64,150 73,240 23,209 31.7% 66,350 67,616 27,129 40.1%
50-Solid Waste Enterprise Fund 11,361,018 12,313,860 6,681,663 54.3% 13,023,050 15,936,422 8,926,212 56.0%
51-Efland Sewer Operating Fund 331,930 331,930 135,334 40.8% 374,480 374,480 117,053 31.3%
53-Sportsplex Fund 3,276,278 3,499,042 1,743,209 49.8% 3,609,186 5,560,103 2,513,736 45.2%
*YTD Actuals include Encumbrances
Attachment 2 15
January/February 2016
NC STATE ECONOMIST
COLLEGE OF AGRICULTURE & LIFE SCIENCES
2016 ECONOMIC OUTLOOK: A STRONGER BEAT TO THE ECONOMY?
M.L. Walden, William Neal Reynolds Distinguished Professor and Extension Economist, NC State University
National Economy: A Turning Point in 2015
Gains in the national economy were strong media—fell during the year and approached 5%
enough in 2015 that the Federal Reserve made by year's end. Gains in the labor force and in
a turn in their monetary policy. Late in the year, both employment counts (household and
the Federal Reserve (the "Fed") announced the payroll) equaled or exceeded post-recessionary
first increase in their key interest rate—the averages. Inflation continued to be a non-
federal funds rate—since before the Great issue. The "core" CPI (Consumer Price Index,
Recession of 2008-2009. The Fed cited the excluding food and energy) indicated that
strength in the economy, and no signs of an inflation was at the Fed's preferred 2% rate,
impending new recession, as reasons for their and that the all-item rate lay well below the
move. Analysts also think the Fed wants to Fed's target. The all-item rate was clearly
moderate recent strong gains in asset impacted by the sharp drop in oil and gasoline
markets—such as the stock market—in order to prices. Also, interest rates were at or near
avert an asset bubble. Asset bubbles are often historical lows in 2015, reflecting both the low
forerunners to a recession, inflationary environment and the Fed's
continuing accommodative posture.
A look at key economic data in Table 1
supports the Fed's assessment of reasonable Key business sector indicators were also
growth in the economy for 2015. Growth of real upbeat. Although relative business investment
GDP (gross domestic product, adjusted for was below the recent (1990-2010) historical
inflation)was stronger than the average over average, there was a gain from the post-
the period since the end of the recession (2010- recessionary period (2010-2014). The same
2014), and approached the twenty year trend was seen for labor productivity. The
average from 1990-2010. A similar pattern was housing market continued to rebound. The
seen for real GDP growth per capita (per stock market's gains were considerably
person). Especially bullish were strong gains in trimmed down in 2015 compared to the
both real personal income and real personal previous few years; but this result was not
consumption per capita; the figures for 2015 surprising considering the market has almost
were above both the post-recessionary average tripled since the bottom of the recession. An
(2010-2014) and the twenty year average international "vote of confidence"was
(1990-2010). registered for the U.S. economy with the strong
gain in the dollar's value. Since a stronger
The national labor market also posted post- dollar makes U.S. exports more expensive, a
recession improvements. The "headline" downside of this "vote" was a slight reduction in
unemployment rate—the rate quoted in the exports. But with continued domestic oil
North Carolina Cooperative Extension Service•Agricultural and Resource Economics
16
NC STATE ECONaMIST
Table 1. Performance and Forecasts of the U.S. Econom
1990-2010 2010-2014
annual annual 2016
average average 20151 (projected)
GENERAL
Real GDP growth rate 2.5% 2.0% 2.2% 2.5%
Real GDP per capita growth rate 1.5% 1.2% 1.4% 1.5%
Real personal income per capita growth rate 1.7% 1.0% 3.1% 1.6%
Real consumption per capita growth rate 1.8% 1.3% 2.4% 2.0%
Headline unemployment rate 5.8% 8.0% 5.0%2 4.7%
Labor force growth rate 1.0% 0.4% 0.6% 0.7%
Household (HH) employment growth rate 0.8% 1.4% 1.4% 1.3%
Payroll jobs growth rate 0.9% 1.8% 1.9% 1.7%
All- item CPI inflation rate 2.5% 1.7% 0.5% 2.0%
Core CPI inflation rate 2.4% 1.9% 2.0% 2.0%
3-month Treasury-bill rate 3.5% 0.1% 0.2% 1.5%
10-year Treasury-note rate 5.5% 2.5% 2.3% 2.8%
BUSINESS
Equipment investment, % of GDP 6.3% 5.6% 5.7% 6.0%
Labor productivity growth rate 2.5% 0.3% 1.7% 1.8%
Residential housing price growth rate 3.4% 1.5% 5.6% 4.0%
Residential housing starts growth rate 6.3%3 -11.2%4 8.7% 11.0%
Dow-Jones Industrial Avg growth rate 7.7% 10.4% 1.1% 3.0%
Trade-weight dollar index 90.6 85.0 106.4 112.0
Net trade balance, % of GDP5 -2.9% -3.4% -2.9% -3.1%
HOUSEHOLDS
Population growth rate 1.2% 1.2% 1.0% 1.3%
Real median HH income growth rate 0.08% 0.07% 5.3% 1.5%
Real hourly earnings growth rate n/a 0.3% 1.9% 1.5%
Average weekly hours n/a 34.4 34.6 34.5
HH debt, % of GDP 75.0% 83.9% 80.0% 81.0%
HH debt payment, % of disposable income 11.8% 10.6% 10.1% 10.2%
Savings rate, % 5.4% 5.8% 5.2% 5.0%
FISCAL POLICY
Federal budget deficit, % of GDP 2.5% 6.1% 2.4% 2.3%
Federal debt, % of GDP 62.8% 97.1% 100.5% 98.5%
Federal interest payments, % of GDP 2.2% 1.4% 1.2% 1.3%
MONETARY POLICY
Federal funds rate, % 3.82%6 0.08%7 0.15% 1.00%
Money supply growth rate 3.1%6 11.2%7 7.5% 5.0%
Excess reserves growth rate 0.4%6 181.8%7 -0.5% -1.0%
Money velocity growth rate 0.5%6 -3.97 -2.0% 0.3%
1 year over year based on the latest data; 2 November; 31990-2006; 4 2006-2014; 5`-`indicates a trade deficit;
6 1990-2007; 7 2007-2014
Sources: Federal Reserve Bank of St. Louis; U.S. Dept. of Commerce; author's forecasts
2
17
NC STATE ECONOMIST SEE:. Ec ,,jiht464,F4Ini , 2016
production reducing the need for imported policymakers—almost tripled between the two
foreign oil, the trade deficit maintained its periods. Besides the weakness of the
moderate level. economy, these actions didn't spark the higher
inflation that many feared for two reasons: the
Households continued to improve their unprecedented increase in excess reserves
economic position in 2015. Real median held at the Fed, and the dramatic drop in
household income grew by 5.3%, well above money velocity. The increase in excess
both the twenty year average and the post- reserves was a way for the Fed to create
recessionary average. Real hourly earnings money as a backstop for the banks, but to keep
increased more than in the years since the that money at the Fed so as not to elevate
recession, and work hours also edged up. prices. The decline in money velocity reduced
Household debt relative to GDP, which almost the ability of dollars in circulation to generate
reached 100% prior to the Great Recession, higher inflation.
moderated close to the 1990-2010 annual
average. Low interest rates also allowed At the end of 2015 the Fed announced a
households to post a thirty-year low in their debt modest increase (0.25 percentage points) in the
service payments as a percent of disposable federal funds rate, the first of many expected
income. The personal savings rate, which had rate hikes. Growth rates in both the money
fallen into negative territory prior to the supply and excess reserves moderated in 2015,
recession, continued to register above 5%. and the reduction in money velocity was
likewise more modest. All these moves
With a stronger economy, the fiscal situation of signaled a shift away from stimulative policies
the federal government became less introduced by the Fed over the past few years.
unbalanced. As a percent of GDP, the deficit in
2015 was smaller than the 1990-2010 annual The National Economy in 2016
average, and well under the average for 2010-
2014 when fiscal policy was used to stimulate The last column in Table 1 presents forecasts
economic growth. The relative size of the total for the national economic indicators in 2016. In
federal debt declined slightly in 2015. And general, the forecasts are upbeat and suggest a
again compliments of low interest rates, the national economy growing at a slightly faster
carrying cost of the federal debt (federal interest pace than in 2015. Among the `General'
payments as a percent of GDP) in 2015 was measures, the biggest changes will be in
under the post-recessionary average and just inflation and interest rates. Oil prices will stop
over half of the annual average posted in the falling—and may even rise modestly—in 2016,
two decades from 1990 to 2010. which will cause the all-item CPI rate to be
After almost a decade of first attempting to stop closer to 2%, as compared to the 0.5% rate in
the economy's decline during the Great 2015. Higher measured inflation will reduce
Recession and then trying to stimulate the some of the real per capita gains in personal
economic recovery, monetary policy operated income and consumption. As a result of the
by the Federal Reserve turned the corner in Fed's tightening of interest rates, short-term
2015. Fed policy was enormously rates will undoubtedly move higher. Long-term
accommodative during and immediately after rates will also move up due to higher expected
the Great Recession. Table 1 shows the future inflation rates, along with expectations
federal funds rate—one of the Fed's key policy that the Fed will push interest rates higher over
tools—averaged 3.8% during 1990-2007, but a multi-year period.
was virtually zero from 2007 to 2014. Likewise,
the annual growth rate in the money supply— The biggest change in the `Business' environ-
another important tool used by Fed ment will be an increase in the rate of housing
3
18
NC STATE
starts and a moderation in the rate of housing recession before the end of the decade. While
price increases. The stock market will gain— the next recession will not be as severe as the
but only slightly—and the dollar will continue Great Recession of 2008-2009, it will require
strengthening. The latter will present retrenchment by households and businesses
challenges for the manufacturing sector and for at least half a year. The best guarantee of a
keep the GDP growth rate from being even moderate recession is modest debt loads by
higher than 2.4%. households and businesses going into the
downturn.
With the Fed's interest rate moves,
`Households' will see higher borrowing costs in The North Carolina Economy: Ahead of the
2016. This will cause the relative size of Pack, But Not Everywhere Nor for Everyone
household debt payments to increase and the Table 2 shows the recent performance of the
savings rate to fall. But more limited household key indicators of the North Carolina economy.
borrowing will mean only a small increase in the Compared to both the longer (1997-2010)
relative size of household debt. An acceleration period and the more recent post-recessionary
in household formation will boost GDP growth. period (2010-2014), North Carolina performed
With regard to `Fiscal Policy', faster economic much better on all measures (1997 is the
beginning year of the longer period due to the
growth will produce larger federal tax revenues, unavailability of state GDP data prior to that
which in turn will keep lids on the relative sizes year). In particular, both real GDP and real
of both the budget deficit and national debt. GDP per capita in North Carolina grew by 50%
However, higher interest rates will mean a rise more than the national average. Labor force
in the relative size of federal interest payments. growth in North Carolina was an astonishing
If the Fed continues raising interest rates five times faster than the national rate, and job
beyond 2016, the impacts on financing the growth from both the household survey and the
national debt will become a prominent issue. payroll survey were stronger than the
The Fed is now on an announced track to be comparable national growth rates. The state's
rapid labor force growth was likely due to in-
less stimulative in its monetary policy. The migration of new households from other states
federal funds rate is forecast to jump to 1.0% by
the end of 2016. Money supply growth will as well as a return of"discouraged workers"
su pp y g (unemployed individuals who had stopped
moderate and excess reserves will slightly looking for work and therefore were not counted
contract. A faster paced economy with higher
interest rates will accelerate money velocity. as officially unemployed) to the active labor
force. The fact that the labor force grew faster
The "R" Word than employment in North Carolina explains the
rise in the state jobless rate during some
The current economic expansion, which began months in 2015.
in mid-2009, is already longer than all but three
of the eleven post-World War II expansions. The state is expected to out-perform the nation
Hence, there is understandable concern about again in 2016. The forecasted 2.1% growth in
the imminent possibility of a new recession. payroll jobs will boost non-farm job numbers by
close to 90,000. The state's "headline"
Although no economic forecast is absolutely unemployment rate will drop to near 5% by
certain, all signs point to no recession in 2016. year's end. Yet job growth will not be evenly
However, historical precedent suggests a likely spread among sectors and salaries.
4
19
NC STATE
Table 2. Relative Performance of the North Carolina Economy
1997-2010 avg 2010-2014 avg 2015 2016 Forecast
NC U.S. NC U.S. NC U.S. NC U.S.
Real GDP growth 2.5% 2.1% 1.3% 2.0% 3.4% 2.2% 3.5% 2.4%
rate
Real GDP growth 0.8% 1.1% 0.2% 1.2% 2.7% 1.4% 2.7% 1.5%
rate per capita
Headline 6.0% 5.8% 8.2% 8.0% 5.5% 5.0% 5.1% 4.7%
unemployment rate
Labor force
1.1% 0.9% 0.06% 0.04% 3.2% 0.6% 3.0% 0.7%
growth rate
Household
employment growth 0.6% 0.5% 1.4% 1.4% 3.1% 1.4% 2.9% 1.3%
rate
Payroll jobs growth 0.4% 0.4% 1.9% 1.8% 2.2% 1.9% 2.1% 1.7%
rate
Sources: U.S. Dept. of Commerce; author's forecasts
Figure 1 shows the annual percentage increase Figure 1. Annual Percentage Change in NC
in employment in major economic sectors for Payroll Employment by Sector
the 2010-2014 and 2015 time periods. The
economic sectors are arranged in declining
f alici<,le.v
order by average salary. Financial services, the
information
top paying sector, lies at the top of the chart
while the sector with the lowest average salary P /et'S sere °°4141"31.41:
(leisure/hospitality) is at the bottom. During manufacturing ,o
both periods the fastest growth generally has government atO
been in the top and lowest paying sectors, while construiaion f -10,04egsg ,
the slowest growth has been in the middle odu/hitn care ° .wirmg
paying sectors. This pattern-one that has t,.cl/tiansp/util
been observed at the national level, and is one
contributor to widening income inequality other Sery
among households-is projected to continue in leisure/hosp
2016.
2 4 For decades, a geographic divide in economic ° 6
performance has prevailed in North Carolina. 2010-2014 2015
Figure 2 shows annual average payroll job
growth for the 2010-14 and 2015 periods in the
state's regions. In 2010-2014, the metro areas However, even with the relatively positive
of Asheville, Charlotte, Durham, Raleigh, and performance of rural regions of the state in
Wilmington clearly outpaced other regions in 2015, broad economic forces still point to
growth. In 2015, the leaders were Charlotte, further urbanization and faster population and
Durham, Greensboro, Winston-Salem, and- job growth in metropolitan regions of North
perhaps surprisingly-rural North Carolina. Carolina in the years ahead.
5
20
NC STATE ECONOMIST
Figure 2. Annual Percentage Change in Payroll Employment in NC Regions
state - P` r w .,amm
asheville �
hurlittgton ° r SAIL'. , : tom
charlotte ®.;
clurhain .nc , ` ;, un
layettevt
gre.'ensltoro-hp
greenville "
raleigh OkotrigUtifSiKASSRAgatte,7 ea �umeran;. ::aara era
wilmington '�' '- '
winston-salem ,
rural & ,.. Trs
-1.5 -1. 0.5 0 0.5 1 1.5 2 2.5 3 3.5 4
m2010-2014 E2015
Table 3. Regional Unemployment Rate Fore-
casts, % (not seasonally-adjusted)
October 2015 December 2016 Regional unemployment rate forecasts for the
Region (Actual) (Forecast) state are given in Table 3. All regions are
Asheville 4.4 4.1 expected to register lower jobless rates at the
Burlington 5.1 4.9 end of 2016 as compared to late 2015. The
Charlotte 5.3 4.2 metro regions of Asheville, Burlington,
Durham 4.8 4.5 Charlotte, Durham, Raleigh, Wilmington, and
Fayetteville 7.3 6.9 Winston-Salem will have year-end 2016 jobless
Greensboro 5.7 5.3 rates under 5%. This rate has traditionally been
High Point
Greenville 5.5 5.3 considered "full-employment" Due to military
Gre
Hickory 5.5 5.3 downsizing, Fayetteville is forecast to end 2016
0
Raleigh 4.7 4.3 with an unemployment rate near 7%. Issues
Rocky Mount 7.7 7.4 related to restructuring their economies for the
Wilmington 5.3 4.8 21st century will keep Rocky Mount's jobless
Winston-Salem 5.2 4.8 rate above 7% and rural North Carolina's rate
Rural areas 6.2 5.8 near 6% in 2016.
NState University
A&T State Univarsity
COOPERATIVE
EXTENSION Employment and program opportunities are offered to ad people regardless of race,color,national origin,sex,age,or disability.
Empowering People•Providing Solutions North Carolina State University,North Carolina A&T State University,US.Department of Agriculture,and local governments cooperating.
6
Attachment 3 21
5
i
5 „ _ v :r 4.1 nehl,t, ,f1
DEPARTMENT OF FINANCE AND ADMINISTRATIVE SERVICES
FY2015-16 SECOND QUARTER
FINANCIAL REPORT
22
Quarterly Financial Report Contents
• General Fund Revenues and I-i;xpenditures Analysis by Major
Revenue Categories and each Department by Functional
Leadership Team
• 5-Page Narrative explaining Major variances (1St Abstract
Attachment)
➢
Narrative delineating any material variance by either
Performance or Timing
• Detailed Comparison of FY2015-16 Budget versus Actual and
FY2014-15 Budget versus Actual Table (2nd Abstract
Attachment)
• NC State 2016 I-i;conomic Outlook (3rd Abstract Attachment)
2
23
General Fund Revenue Overview
• Solid revenue performance consistent with improving
economy and consumer confidence
• Property tax revenue performance reflects Tax
Administration's Office collection efforts; improved
processing of returned mail and increased taxpayer
participation in payment plans; property tax revenues
comprise 71 % of Budgeted General Fund revenues
• Sales tax revenues accounts for three months of economic
activity; these revenues are the next largest revenue source
accounting for 9.6% of Budgeted General Fund revenues
• Remaining 20% of revenues consists primarily of
Intergovernmental and Charges for Services
3
24
General Fund Revenues Budget versus Actual
Comparative Analysis
FY2015-16 FY2015-16 YTD % FY2014-15 FY2014-15 YTD %
Category Original Budget Revised Budget YTD Actual Collected Category Original Budget Revised Budget YTD Actual Collected
Property Tax $ 147,551,332 $ 147,551,332 $120,454,187 81.6% Property Tax 145,714,650 $ 145,714,650 $117,523,829 80.7%
Local Option Sales Tax 20,652,132 20,652,132 4,321,358 20.9% Local Option Sales Tax 19,001,962 19,001,962 3,943,843 20.8%
Licenses and Permits 313,000 313,000 77,552 24.8% Licenses and Permits 313,000 313,000 83,166 26.6%
Charges for Services 10,766,030 10,807,314 4,602,324 42.6% Charges for Services 9,799,005 9,866,868 4,499,294 45.6%
Intergovernmental 15,000,278 18,524,600 7,602,005 41.0% Intergovernmental 13,575,486 16,354,491 7,967,007 48.7%
Transfers from Other Funds 1,052,600 1,052,600 - 0.0% Transfers from Other Funds 1,052,600 1,052,600 - 0.0%
Investment Earnings 52,500 52,500 5,656 10.8% Investment Earnings 105,000 105,000 3,726 3.5%
Miscellaneous 737,468 972,934 645,499 66.3% Miscellaneous 798,065 934,769 520,650 55.7%
Fund Balance Appropriation 10,650,770 10,826,066 - 0.0% Fund Balance Appropriation 10,068,343 10,150,647 - 0.0%
General Fund Revenues 206,776,110 210,752,478 137,708,580 65.3% General Fund Revenues 200,428,111 203,493,987 r$134,541,516 66.1%
• FY 2015-16 General Fund revenues are on target with the adopted budget; through the second quarter $137.7
million or 65.3% of budgeted revenues has been collected as compared to $134.5 million or 66.1% in the prior
year
• Property Tax revenues totals $120.4 million or 81.6% of Budgeted Revenues compared to $117.5 million or
80.7% in the prior year; increased collections attributed to expedited processing of returned mailings; the
remaining amount of property tax revenues will be collected in January;
• Sales Tax revenues reflects three months of activity; the NC Department of Revenue (NCDOR) remittances
to local jurisdictions has normally lagged up to three months throughout the State; attributed to the time to
process and remit distributions to local governments
• Charges for Services revenues collected are $4.6 million or 42.6% of Budgeted Revenues compared to $4.4
million or 45.6% in the prior year
• Intergovernmental revenues which includes grant remittances are $7.6 million or 41% of Budgeted Revenues
compared to $7.9 million or 48.7% in the prior year
25
General Fund Expenditure Overview
• Expenditures are indicated by the Functional
Leadership Teams
• Department Expenditures are within Budgeted
appropriations
• 2Q Spending accounts for 45% of Budgeted
Fxpenditures as compared to 44.6% in the prior year
• No significant variances attributed to Performance
• Debt Service payments are budgeted in Non-
Departmental
5
26
General Fund Expenditures Budget versus Actual
Comparative Analysis
FY2015-16 FY2015-16 YTD % FY2014-15 FY2014-15 YTD %
Category Original Budget Revised Budget YTD Actual Expended Category Original Budget Revised Budget YTD Actual Expended
Community Services $ 10,568,530 $ 10,730,406 $ 4,876,052 45.4% Community Services 9,706,823 $ 9,881,248 $ 4,444,971 45.0%
General Government 7,761,418 7,834,873 3,620,299 46.2% General Government 7,052,986 7,148,018 3,365,899 47.1%
Public Safety 22,915,823 23,134,660 11,161,607 48.2% Public Safety 22,021,055 22,167,858 9,642,227 43.5%
Human Services 33,941,247 37,606,119 17,935,939 47.7% Human Services 32,016,307 34,446,023 16,922,393 49.1%
Education 78,837,341 78,837,341 39,046,174 49.5% Education 76,847,414 76,847,414 37,929,707 49.4%
Support Services 11,726,879 11,995,293 6,695,003 55.8% Support Services 11,087,403 11,343,016 6,170,740 54.4%
Non-Departmental 41,024,872 41,880,133 12,029,303 28.7% Non-Departmental 41,696,123 42,449,708 12,682,157 29.9%
General Fund Expenditures 206,776,110 212,018,826 95,364,376 45.0% General Fund Expenditures 200,428,111 204,283,285 91,158,094 44.6%
• FY 2015-16 General Fund expenditures in line with historical performance
• 2Q FY2015-16 expenditures are $95.3 million or 45% of Budgeted Expenditures compared with $91.1 million
or 44.6% in the prior year
• Community Service includes Animal Services, NC Cooperative Extension, Economic Development, and
Planning and Inspections; spending rate of 45.4% of Budgeted Expenditures is consistent with the prior year
at 45%
• General Government includes Board of Elections, Clerk to the Board, County Attorney, County Manager,
Register of Deeds, and Tax Administration; spending rate of 46.2% of Budgeted Expenditures is .9% less
consistent with historical rate
• Education expenditures in line with prior year and represents Current Expenditures, Fair Funding, and
Recurring Capital; School Debt Service of $16 million is budgeted in Non-Departmental
• Support Services includes Asset Management, Community Relations, Finance, HR, and IT; spending rate of
55.8% reflects the payment dates for workers compensation, bonds/insurance, and IT contracts
27
Investments Overview
• Orange County funds invested in North Carolina Capital
Management Trust (NCCMT) Fund
— Fund is a mutual fund that is managed by Fidelity Management
and Research Company
— Fund is rated AAA by Standard & Poor's
— The I-i;ffective Yield for the NCCMT was .24% as of December
31 , 2015
— The Average Portfolio Maturity was 43 Days
— Portfolio composition is: High Grade Commercial Paper
(69.7%), U.S. Treasury Securities (16.7%), Federal Agency
(12.8%), and Cash (.8%)
— I-i;ffective Yield is consistent with Interest Rate environment
— December 16 Federal Reserve meeting minutes indicate that
interest rates will rise slower than previous recoveries
■
28
Federal Funds Rate Pro 'ections
l
lisle
3.16% 3.41%
5
i
I
* 4
ell
1:25
• .t.
M •
in
* SI •
la
MM ,
D
II I I I 1 I I
24115 21114.i :9}1 7 2018 L Hger rut
Source: Minutes of Federal Reserve Meeting December 16, 2015
29
Economic Overview
• NC State 2016 Fi:conomic Outlook indicates:
— No signs of any slow down in the economy
— By December 2016 Regional unemployment is projected
to be below 5% as compared to the 8% average during the
Great Recession (2010-2014)
— State labor force growth rate is projected to increase 3% as
compared to .06% average between 2010-2014; due to
discouraged workers returning to the labor force
— Continued widening income inequality between highest
average salaried sectors of Financial Services and
Information Technology
— The lowest average salaries are in Leisure and Hospitality,
Trade, Utility, and Transportation sectors
9
30
Questions