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Home My WebLink AboutORD-2018-031 Fiscal Year 2018-19 Budget Amendment 2ORD-2018-031 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date:October 16, 2018 Action Agenda Item No.8-i SUBJECT: Fiscal Year 2018-19Budget Amendment#2 DEPARTMENT:Finance and Administrative Services ATTACHMENT(S):INFORMATION CONTACT: Attachment 1. Budget as Amended Spreadsheet Attachment 2.Year-To-Date Budget Summary Attachment 3. Letter of Request from Cedar Grove Fire Department Attachment 4. Solid Waste Memo on Current Recycling Markets Paul Laughton, (919) 245-2152 Gary Donaldson, (919) 245-2453 PURPOSE: To approve budget and grant project ordinance amendmentsfor fiscalyear 2018- 19. BACKGROUND: Animal Services 1.The Animal Services Department has received additional revenue for the following purposes: x Receipt and appropriation of Petrie Foundation grant funds in the amount of $25,000within the Spay and Neuter Fund, a special revenue fund separate from the General Fund. These funds will beusedtoward the County’sspaying and neutering programs. x Receipt and appropriation of Ubel Greeno grant funds in the amount of $3,232 within the General Fund. These funds will be used toward a musical enrichment program at the County’s Animal Shelter. This budget amendment provides for the receipt and appropriation of these additional funds. (Attachment 1, column 1) 1 SOCIAL JUSTICE IMPACT:There is no Orange County Social Justice Goal impact associated with this item. Department on Aging 2.The Department on Aging has received notification of the following additional revenue: x Medicare Improvements for Patients and Providers Act (MIPPA) – receipt of $3,927 in MIPPA fundsfrom the N.C. Department of Insuranceto be used for temporary staff and supplies related tothe Volunteer Connect 55+ Senior Health Insurance and Information Program(SHIIP). x Volunteers Income Tax Assistance (VITA) Program – receipt of $2,450 from the Triangle United Way to pay for seasonalpersonnel in support of the VITA program in Orange County. x Family Caregiver Funds – receipt of additional funds of $15,593 from Triangle J Council of Governments and the N.C. Division of Aging and Adult Services for the Family Caregiver Support Program. Funds will go toward respite services. x Health Promotion Activities – receipt of additional funds of $5,986 from the Triangle J Area Agency on Aging for evidence-based classes and programs. x State Senior Center General Purpose Funds – receipt of $21,386 from the N.C. General Assembly through the Triangle J Area Agency on Aging to be used to cover temporary personnel and program supplies atthe Passmore and Seymour Senior Centers.$4,000 of these funds will be used in the department’s Senior Citizen Health Promotion Grant project, outside of the General Fund. x Senior Health Insurance and Information Program (SHIIP) Funds – receipt of $6,243 in SHIIP funds from the N.C. Department of Insurance to be used for outreach and program supplies related to the Volunteer Connect 55+ Senior Health Insurance and Information Program (SHIIP). This budget amendment provides for the receipt of these additional funds, and amends the current Senior Citizen Health Promotion Grant Project Ordinance as follows:(See Attachment 1, column 2) Senior Citizen Health Promotion Wellness Grant ($4,000)- Project # 294303 Revenues for this project: Current FY 2018-19 FY 2018-19 Amendment FY 2018-19 Revised Senior Citizen Wellness Funds$137,043$4,000$141,043 Total Project Funding$137,043$4,000$141,043 Appropriated for this project: Current FY 2018-19 FY 2018-19 Amendment FY 2018-19 Revised Senior Citizen Wellness$137,043$4,000$141,043 Total Costs $137,043$4,000$141,043 SOCIAL JUSTICE IMPACT:The following Orange County Social Justice Goals are applicable to these items: x GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. 2 x 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. Cedar Grove Fire Department 3.The Cedar Grove Fire Department has requested a portion ($60,000)of thedistrict’s Unassigned Fund Balance to be used to help offset the cost of replacing 10 Self- Contained Breathing Apparatus (SCBA) packs and 30 SCBA bottles.(See Attachment 3) With this appropriation, approximately $17,100 remains available in the district’s Unassigned Fund Balance. This budget amendment provides for the appropriation of $60,000 from the district’s Unassigned Fund Balance for the above stated purpose. (See Attachment 1, column 3). SOCIAL JUSTICE IMPACT:The following Orange County Social Justice Goalis applicable to thisagenda item: x GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. Solid Waste EnterpriseFund 4.The Solid Waste Enterprise Fund is currently experiencing a declining recycling commodities market compared to recent years, and has experienced unexpected expenditure increases in recycling processingfees. These already depressed market conditions, coupled with significant infrastructure damage from Hurricane Florence at two major shipping ports and paper mills, have resulted in a stockpiling of material at local material processing facilities with an inability to process additional material. In addition to these issues, China has limitedthe amount of material it iswilling to accept through the enactment of the National Sword Policy. China has historically accepted the majority of the United States exported recyclables. The National Sword Policy is China’s latest, and strictest, regulation on imports of solid waste as raw materials. (See Attachment 4). As a result, the cost to have recyclables processed will be significantly more than budgeted in FY 2018-19. The Commissioner Approved Budget for FY 2018-19 included $30,000 to cover recycling processing fees, but based on the current issues stated above, it is estimated that an additional $445,947 will be needed to cover the recycling processing costs for FY 2018-19. The actual YTD expenditures through September 2018 is $101,917. The Solid Waste Enterprise Fund’s Unrestricted reserves at June 30, 2018 is estimated at $6.75 million, so there are sufficient reserves available to cover these increased costs. This budget amendment provides for the appropriation of $445,947 from available Solid Waste reserves to cover the estimated increased recycling processing costs.(Attachment 1, column 4) SOCIAL JUSTICE IMPACT:The following Orange County Social Justice Goalis applicable to thisitem: 3 x GOAL: ESTABLISH SUSTAINABLE AND EQUITABLE LAND-USE AND ENVIRONMENTAL POLICIES The fair treatment and meaningful involvement of people of all races, cultures, incomes and educational levels with respect to the development and enforcement of environmental laws, regulations, policies, and decisions. Fair treatment means that no group of people should bear a disproportionate share of the negative environmental consequences resulting from industrial, governmental and commercial operations or policies. Technical Amendment 5.The Commissioner Approved FY 2018-19 included $50,000 for the second year of implementing the County’s Administrative Vehicle Lease Program. A portion of this amount includes two (2) vehicles for the Department of Social Services. In an effort to secure 50% reimbursement for the cost of these leased vehicles,budgeted funds of $7,974need to be moved from Asset Management Services to the Department of Social Services. This technical amendment provides for the reduction of budgeted funds of $7,974in Asset Management Services, and an increase of budgeted funds of $7,974in the Department of Social Services for the above stated purpose. (See Attachment 1, column 5) SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with this item. FINANCIAL IMPACT: Financial impacts are included in the backgroundinformation above. This budget amendment provides for the receipt of these additional funds and increases the FY 2018-19 budget in the General Fund by $54,817,increases the Grant Projects Fund by $4,000; increases the Spay/Neuter Fund by $25,000, increases the Fire Districts Fund by $60,000, and increases the Solid Waste Enterprise Fund by $445,947. RECOMMENDATION(S):The Manager recommends the Board approve budgetand grant project ordinance amendments forFiscal Year 2018-19. 4 1 Attachment 1. Orange County Proposed 2018-19 Budget Amendment The 2018-19 Orange County Budget Ordinance is amended as follows: Original Budget Encumbrance Carry Forwards Budget as Amended Budget as Amended Through BOA #1 #1. Animal Services - receipt of a $25,000 Petrie Foundation Grant within the Spay/Neuter Fund; and receipt of $3,232 in Ubel Greeno grant funds in the General Fund #2 Department on Aging - receipt of additional revenue for various programs within the department; and $4,000 within the Senior Citizen Health Promotion Wellness Grant Project #3 Cedar Grove Fire Department - BOCC approved appropriation of $60,000 from the district's available Unassigned Fund Balance #4 Solid Waste Enterprise Fund - BOCC approved appropriation of $445,947 from the available reserves within the Solid Waste Enterprise Fund Budget as Amended Through BOA #2 General Fund Revenue Property Taxes158,561,382$ -$ 158,561,382$ 158,561,382$ -$ -$ -$ -$ 158,561,382$ Sales Taxes24,140,242$ -$ 24,140,242$ 24,140,242$ -$ -$ -$ -$ 24,140,242$ License and Permits313,000$ -$ 313,000$ 313,000$ -$ -$ -$ -$ 313,000$ Intergovernmental17,296,375$ -$ 17,296,375$ 17,394,701$ -$ 49,135$ -$ -$ 17,443,836$ Charges for Service12,456,495$ -$ 12,456,495$ 12,458,995$ -$ -$ -$ -$ 12,458,995$ Investment Earnings415,000$ 415,000$ 415,000$ 415,000$ Miscellaneous3,114,760$ 3,114,760$ 3,174,420$ 3,232$ 2,450$ 3,180,102$ Transfers from Other Funds1,637,600$ 1,637,600$ 1,637,600$ 1,637,600$ Fund Balance8,820,099$ 8,820,099$ 8,820,099$ 8,820,099$ Total General Fund Revenues 226,754,953$ -$ 226,754,953$ 226,915,439$ 3,232$ 51,585$ -$ -$ 226,970,256$ Expenditures Support Services13,182,883$ -$ 13,182,883$ 13,182,883$ -$ -$ -$ -$ 13,182,883$ General Government22,214,157$ -$ 22,214,157$ 22,214,157$ -$ -$ -$ -$ 22,214,157$ Community Services13,159,487$ -$ 13,159,487$ 13,200,850$ 3,232$ -$ -$ -$ 13,204,082$ Human Services39,202,652$ -$ 39,202,652$ 39,320,703$ -$ 51,585$ -$ -$ 39,372,288$ Public Safety25,318,777$ -$ 25,318,777$ 25,306,277$ -$ -$ -$ -$ 25,306,277$ Education109,871,663$ 109,871,663$ 109,871,663$ 109,871,663$ Transfers Out3,805,334$ -$ 3,805,334$ 3,818,906$ 3,818,906$ Total General Fund Appropriation 226,754,953$ -$ 226,754,953$ 226,915,439$ 3,232$ 51,585$ -$ -$ 226,970,256$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Solid Waste Fund Revenues Sales & Fees8,907,871$ 8,907,871$ 8,907,871$ 8,907,871$ Intergovernmental263,000$ 263,000$ 263,000$ 263,000$ Miscellaneous194,550$ 194,550$ 194,550$ 194,550$ Licenses & Permits 130,000$ 130,000$ 130,000$ 130,000$ Interest on Investments45,000$ 45,000$ 45,000$ 45,000$ From General Fund (Sanitation Opers)500,000$ 500,000$ 500,000$ 500,000$ Appropriated Fund Balance-$ -$ -$ -$ 445,947$ 445,947$ Total Revenues 10,040,421$ -$ 10,040,421$ 10,040,421$ -$ -$ -$ 445,947$ 10,486,368$ Expenditures General Services 10,040,421$ -$ 10,040,421$ 10,040,421$ 445,947$ 10,486,368$ Fire District Funds Revenues Property Tax6,057,908$ 6,057,908$ 6,057,908$ 6,057,908$ Intergovernmental-$ -$ -$ -$ Investment Earnings1,966$ 1,966$ 1,966$ 1,966$ Appropriated Fund Balance -$ -$ 60,000$ 60,000$ Total Fire Districts Fund Revenue 6,059,874$ -$ 6,059,874$ 6,059,874$ -$ -$ 60,000$ -$ 6,119,874$ Expenditures Remittance to Fire Districts 6,059,874$ -$ 6,059,874$ 6,059,874$ 60,000$ 6,119,874$ 5 2 Attachment 1. Orange County Proposed 2018-19 Budget Amendment The 2018-19 Orange County Budget Ordinance is amended as follows: Original Budget Encumbrance Carry Forwards Budget as Amended Budget as Amended Through BOA #1 #1. Animal Services - receipt of a $25,000 Petrie Foundation Grant within the Spay/Neuter Fund; and receipt of $3,232 in Ubel Greeno grant funds in the General Fund #2 Department on Aging - receipt of additional revenue for various programs within the department; and $4,000 within the Senior Citizen Health Promotion Wellness Grant Project #3 Cedar Grove Fire Department - BOCC approved appropriation of $60,000 from the district's available Unassigned Fund Balance #4 Solid Waste Enterprise Fund - BOCC approved appropriation of $445,947 from the available reserves within the Solid Waste Enterprise Fund Budget as Amended Through BOA #2 Grant Project Fund Revenues Intergovernmental98,426$ 98,426$ 222,817$ 4,000$ 226,817$ Charges for Services65,000$ 65,000$ 65,000$ 65,000$ Transfer from General Fund82,043$ 82,043$ 82,043$ 82,043$ Miscellaneous -$ 184$ 184$ Transfer from Other Funds -$ -$ -$ Appropriated Fund Balance-$ -$ -$ -$ -$ Total Revenues 245,469$ -$ 245,469$ 370,044$ -$ 4,000$ -$ -$ 374,044$ Expenditures Support Services-$ -$ -$ -$ -$ -$ -$ -$ -$ Historic Resources Inventory Grant25,000$ 25,000$ 25,000$ 25,000$ Community Services25,000$ -$ 25,000$ 25,000$ -$ -$ -$ -$ 25,000$ Senior Citizen Health Promotion(Wellness)137,043$ -$ 137,043$ 137,043$ 4,000$ 141,043$ Outreach Literacy Time to Read-Library83,426$ 83,426$ 58,001$ 58,001$ Human Services220,469$ -$ 220,469$ 195,044$ -$ 4,000$ -$ -$ 199,044$ Local Reentry Council Grant - CJRD 150,000$ 150,000$ Public Safety -$ -$ -$ 150,000$ -$ -$ -$ -$ 150,000$ Total Expenditures 245,469$ -$ 245,469$ 370,044$ -$ 4,000$ -$ -$ 374,044$ 6 Attachment 2 General Fund Budget Summary Original General Fund Budget$226,754,953 Additional Revenue Received Through Budget Amendment #2 (October 16, 2018) Grant Funds$137,750 Non Grant Funds$77,553 General Fund - Fund Balance for Anticipated Appropriations (i.e. Encumbrances)$0 General Fund - Fund Balance Appropriated to Cover Anticipated and Unanticipated Expenditures $0 Total Amended General Fund Budget$226,970,256 Dollar Change in 2018-19 Approved General Fund Budget $215,303 % Change in 2018-19 Approved General Fund Budget 0.09% Original Approved General Fund Full Time Equivalent Positions 904.270 Original Approved Other Funds Full Time Equivalent Positions 90.850 Total Approved Full-Time-Equivalent Positions for Fiscal Year 2018-19 995.120 Year-To-Date Budget Summary Fiscal Year 2018-19 Authorized Full Time Equivalent Positions Paul: increase time-limited Office Assistant II position in Health by .17 FTE; increase of .25 FTE in Eldercare Manager position; moves 1.0 FTE Occupational Therapist and .75 FTE Human Services Cooordinator from Grant Project Fund to General Fund (BOA #1) Paul: approved tme-limited 1.0 FTE Reentry Coordinator position and a time-limited 1.0 FTE Reentry Case Manager with CJRD; move 1.0 FTE Occupational Therapist and .75 FTE Human Services Coordinator to General Fund (BOA #1); 1.0 FTE Information Technology Analyst position in the Sheriff's Office (9/20/18 mtg.) 7 8 Attachment 3 t Cedar Grove Fire Department 720 Hawkins Rd. Cedar Grove. NC. 27231 (919) 7329585 To: Orange County Board.of Commissioners Cedar Grove Fire Department would Pike to request money from our Unassigned Fund Balance account. Fire Department is in the process of updating its SCBA(Self Contained Breathing Apparatus)to the new NFPA Standards and would like to have this money to help pay for them. Cedar Grove Fire Department applied for a grant through NC Fire Marshal's Office and all Orange County Department were denied the grant. Fire Department would like to request $60,000.00 from our Fund Balance and fire department wi I I pay the remainder. Quote for the SCBA packs are as followed: 10 SCBA packs=$50,530.00 30 SCBA Bottles= $27,750.00 Total $78,280.00 Thanks for your Time: Robert Mann President, Board of Directors Attachment 4 ORANGE COUNTY NORTH CAROLINA SOLID WASTE MANAGEMENT 1207 Eubanks Road Phone(919)968-2788 PO Box 17177 Fax(919)932-2900 Chapel Hill,North Carolina 27515 i Memorandum To: Bonnie, Hammersley, Orange County Manager CC: Gary Donaldson,Chief Financial Officer From: Robert Williams,Orange County Solid Waste Diree Subject: Recycling Markets- Commodity Markets& Hurricane Florence Date: September 27, 2018 Background The County recycles approximately 14,000 tons per year and shares the revenue and costs with a recycling processor. When recycling commodity markets are robust the County receives revenues, known as a "rebate",for the material delivered to the recycling processor. However, the corollary of a down commodity market results in the County having to pay to have material recycled. In the last eight (8) months, the Solid Waste Management Department (SWMD) has experienced unexpected expenditure increases in the Recycling Processing account (50352020-682005). In February 2418, and again in July 2018, the SWMD reported expected budget shortfalls due to falling recycling commodity market prices. Following Hurricane Florence, in September 2018, SWMD experienced an additional cost increase related to supply chain issues and infrastructure damage to recycling processing facilities located throughout the Carolinas. Table 1 below highlights the past three years of recycling processing fees and rebates;the current market rate is at a historical low. $20.00 Table 1: Recycling Rebates and Payments $10.00 $- $(10.00) $(20.00) $(30.00) $(40.00) $(50.00) $(60.00) — $(70.00) $(80.00) Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Recycling Market Conditions Over the last year, recycling commodity values have continued to drop to historically low levels. In addition, China, has limited the amount of material they are willing to accept through the enactment of the National Sword Policy. China has historically accepted the majority of the United States www.oran ecount nc. oar rec clip 10 exported recyclables. The National Sword is China's latest and strictest regulation on imparts of solid waste as raw materials. In addition, Hurricane Florence caused significant infrastructure damage at two major North and South Carolina shipping ports, and paper mills located in Hartsfield, South Carolina owned by the recycling processor Orange County uses. Thus, mixed paper being processed now at the Raleigh facility cannot be sent to the flooded paper mills, nor can they be shipped from the ports. If the mills are not back online within a few weeks, processors may have to temporarily landfill mixed paper. Furthermore, damage caused by Hurricane Florence has necessitated that our recycling processor pay additional costs to have the recycling material processed. The material quality and value of all material throughout the Hurricane Florence affected region, is further degraded because of wet and muddy conditions, and there are fewer viable options as to where the material can go.This results in the processor having to slow down the sorting lines to discard wet material which further reduces productivity and efficiency, and increases costs. Fiscal Year 2018-2019 Impacts The original FY1819 budget requested $30,000 to cover recycling processing tees. Based on current markets, it is estimated, at minimum, $475,947 will be needed to cover the recycling processing i costs for FY1819. Using the current projections, the account is estimated to be $445,947 over budget. I Table 2 below Highlights cost incurred to date and monthly projections based upon historical tonnage. SWMQ staff recommends using Solid Waste reserve funds to cover the unexpected expenditures. i Table 2:Fiscal Year 2018-2019 Expected Recyciing Processing Fees Processor Processor i Processor 1 - Month Tonnage Fee Tonnage Fee Monthly Cost Jui-18 1107 $ (31.29) 0 $ (35.00) $ (34,635) Aug-18 1055 $ (32.93) 120 $ (21.00) $ (37,261) Sep-18 732 $ (32.93) 0 $ - $ (24,105) f Sep-18 132 $ (66.28) 132 $ (24.00) $ (1,1,930) Oct-18 543 $ (66.28) 543 $ (26.00) $ .(50,066) Ncv-18 _548 $ (67.78) 548 $ (30.00) $ (53,571) Dec-18 478 $ (45.00) 578 $ (30.00) $ (38,879) Jan-19 600 $ (45.00) 6001 $ (30.00) $ (45,000) Feb-19 550 $ (40.00) 550 $ (30.00) $ (38,500) Mar- 19 550 $ (40.00) 550 $ (30.00) $ (38,500) Apr-19 1150 $ (30.00) 0 $ - $ (34,500) May- 19 1150 $ (30.00) 0 $ - $ (34,500) Jun-19 1150 $ (30.00) 0 $ - $ (34,500) Overall $ (475,947) Next Steps The uncertainty of this situation makes it difficult to make both short-term and long-term decisions. Solid Waste staff is developing a Request for Proposal which would insulate the County from the fluctuating commodity markets and provide some price stability, but would not address the impacts of Hurricane Florence and the costs associated with repairing and implementing new infrastructure. Orange County is also not in the strongest position, at the current time, to enter into contractual agreements, but there is a financial imperative to stabilize month to month costs. 11 SWMD staff has contacted all processors in the region to investigate what recycling options exist. With current conditions,the only feasible option is for Orange County to split shipments of recyclable material between two processors, both located in Raleigh. Neither processor, at this time, is able to handle the full quantity. Both processors will continue to provide the County with information on processing costs, as the ports and mills are repaired and conditions change. SWMD staff anticipates recycling costs may lessen in two (2) to six(6) months. Table 2 above assumes the repairs will take six(6) months, with no adjustment for the already depressed marketplace. The County is committed to providing high-quality recycling services. That said, there is a tipping point where the economic costs outweigh the environmental benefit. If the recycling processing fee continues to exceed $6Q per ton, SWMD recommends discussions with the County Manager, BOCC, SWAG, and community members be had, to determine whether a portion of collected recycling material should be disposed of in a landfill on a temporary basis, especially if our processors are Iandfilling indirectly. Landfilling also incurs a cost, both in the short term and in terms of used landfill space for future generations, but in the immediate term the rate of financial loss would be lower. SWMD will continue to monitor and report on recycling processing fees both as it relates to the commodity markets and the outfall of Hurricane Florence. l i 6 i