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HomeMy WebLinkAboutAgenda - 12-05-2016 - 7-c - Financial Policy for Outside Agency Funding 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 5, 2016 Action Agenda Item No. 7-c SUBJECT: Financial Policy for Outside Agency Funding DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Bonnie Hammersley, (919) 245-2300 Attachment 1: DRAFT Outside Agency Gary Donaldson, (919) 245-2453 Funding Financial Policy PURPOSE: To establish a financial policy for Outside Agency Funding that provides guidance on the appropriation of County funds to the non-profit community, with the scope of the policy establishing funding targets and criteria. BACKGROUND: Each year as a part of the budget process, Outside Agencies' applications and scorecards are provided to the County Manager to assist in recommending funding decisions as part of the Manager's Recommended Budget. The Board of County Commissioners then approves funding as part of the Budget Adoption process in June of each year. November 2016 Work Session Following a presentation and work session on November 10, 2016, the Board of County Commissioners directed staff to develop a financial policy which specifies the funding methodology for funding Outside Agencies. The following five funding scenarios were presented; 1) Percent of Budget 2) Previous Year's Allocation as Base 3) Incremental Unit of Tax Rate 4) Dollars Per Capita 5) Fixed Dollar Amount The percent of budget methodology was determined to be the most appropriate funding option for the County. The County has historically funded Outside Agencies at 1% of the County Budget (Less the Education Appropriation). The BOCC directed staff to increase the funding 2 target from 1% to 1.2%. Based on the FY 2016-17 Approved Budget (Less the Education Appropriation), 1% equates to $1,121,467 and 1.2% equates to $1,345,761. The work session included discussion on the merits of capital funding as part of Outside Agency Funding. The general sentiment was that the financial policy be primarily for funding operating expenses, but that there may be an exception for BOCC consideration. The financial policy provides guidance for a capital funding exception (Attachment 1). FINANCIAL IMPACT: The policy will generate additional expense of approximately $200,000 based on FY2016-17 Adopted budget compared to the current 1% allocation. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this agenda item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. • GOAL: ENABLE FULL CIVIC PARTICIPATION Ensure that Orange County residents are able to engage government through voting and volunteering by eliminating disparities in participation and barriers to participation. RECOMMENDATION(S): The Manager recommends that the Board review and approve the Outside Agency financial policy. 3 Attachment 1 Financial Policy Outside Agency Funding Orange County provides grants to outside agencies to perform a variety of services for Orange County residents. On annual basis, the County will target 1.2% of the County's General Fund expenditures, less the appropriation for education expenses, for the purpose of funding outside agency operations. The education appropriation includes funds allocated to fund current expenses, recurring capital, long range capital, health and safety contracts, school debt service, and funds provided to the Durham Technical Community College. The County Manager shall design an outside agency application and scoring process. This process will be used to evaluate outside agency applications and make recommendations to the Board of Orange County Commissioners on individual outside agency grant awards. A brief justification will be available to the Board of Commissioners to explain the County Manager's recommendations. Outside agency grants shall be used to fund an agency's operating expenses. These operating expenses may include personnel, contracted services, debt or loan payments, or other expenses related to the day to day operations of the agency. The County will not provide capital grants to outside agencies for the purpose of financing facility acquisition or construction, including contributions to capital campaigns. Exceptions to this general policy include the acquisition or construction of a facility owned or leased by the County for the purpose of providing space to outside agencies or space provided to outside agencies that were initiated by or originated as programs of County government. The Board of Commissioners may also consider capital funding request that include a repayment feature. The terms and conditions of this repayment would be approved by the Board of Commissioners in a formal agreement between the County and the outside agency.