HomeMy WebLinkAboutAgenda - 12-05-2022; 12-4 - Information Item - Memorandum - FY 2021-22 General Fund Budget versus Actual Results and Fund Balance Classification 1
ORANGE COUNTY
NORTH CAROLINA
FINANCE and ADMINISTRATIVE SERVICES
Gary Donaldson,CTP,Chief Financial Officer I gdonaldson@orangecountync.gov I PO Box 8181, Hillsborough, NC 27278 1 919.245.2453
INFORMATION ITEM
To: Board of County Commissioners
From: Gary Donaldson, Chief Financial Officer
Date: November 25, 2022
Re: FY 2021-22 General Fund Budget versus Actual Results and Fund Balance Classification
As additional supporting information to a forthcoming Budget Amendment and Audit Presentation on December 13,
2022, please find attached a summary of FY 2021-22 General Fund Financial results.
Fiscal Year 2022-General Fund
Budget vs
Original BudgelRevised Budget Actual Actual Variance percentage%Variance Explanation
Revenue
40-PROPERTY TAXES $177,399,692 $177,399,692 $180,701,712 $3,302,020 102% Reflects higher collection rate,natural growth and higher motor vehicle assessments
41-SALES TAXES $28,952,047 $28,952,047 $37,996,379 $9,044,332 131% Reflects stronger performance from Articles 39,40 and 42=$5.6M and$3M more in Hold Harmless
42-LICENSES&PERMITS $274,550 $274,550 $268,824 ($5,726) 98% Reflects lower Gross Receipts from Franchise Fee
43-CHRGS FOR SERVS $11,470,907 $11,961,766 $13,811,583 $1,849,817 115% Reflects$1.2 million in Register of Deeds and$1 million Emergency Service billings.
44-INTERGOVERNMENTAL $16,598,606 $21,879,314 $18,865,133 ($3,014,181) 86% Timing Variance on State Grant Awards
45-BONDS&ALTERN FINAN $0 $772,494 $585,885 ($186,609) 76% Qualified School Bond Reimbursements and Cost of Issuance fro Financings
46-INVESTMENT INCOME $10,300 $10,300 $84,805 $74,505 823% Reflects increasing Interest Rate environment
47-MISCELLANEOUS $4,013,571 $4,157,258 $4,189,002 $31,744 101% Various items including Donaltions,Lease Rentals and Items subject to Audit reclassification
49-APPROP FUND BAL $1,968,184 $14,412,746 $0 ($14,412,746) 0% No actual FB appropriation needed due to strong Budget versus Ac
48-TRANSFERS OUT $74,504 $95,552 $106,691 $11,139 112% Reflects transfers-Article 46($74K),Jail Inmate($11K),County Capital($20K)to support Facility Master Plan
Total $240,762,361 $259,915,719 $256,610,014 ($3,305,705) 99%
Expense
40-COMMUNITY SERVICES $13,621,295 $14,465,523 $12,966,062 ($1,499,461) 91% Reflects Salary Attrition and Non-Personnel Savings
25-GENERAL GOVERNMENT $10,277,361 $11,640,646 $11,282,740 ($357,906) 97% Reflects Salary Attrition and Non-Personnel Savings
50-PUBLIC SAFETY $28,528,552 $28,683,878 $27,822,848 ($861,030) 98% Reflects Salary Attrition and Non-Personnel Savings
30-HUMAN SERVICES $40,547,146 $44,188,765 $39,736,329 ($4,452,436) 90% Reflects Salary Attrition and Non-Personnel Savings
20-SUPPORT SERVICES $12,881,850 $16,069,316 $15,220,129 ($849,187) 97% Reflects Salary Attrition and Non-Personnel Savings
80-TRANSFERS $1,044,002 $9,256,798 $9,320,892 $64,094 101% Reflects$6.2M to County Capital,$1.31M Lottery,$790K Sportsplex,$560K Visitors,$339K Afford Housing
70-EDUCATION $93,834,876 $95,583,514 $94,916,033 ($667,481) 100% Monthly fixed payments
90-DEBT SERVICE $40,027,279 $40,027,279 $39,951,459 ($75,820) 100% Fixed costs paid on maturity dates
Total $240,762,361 $259,915,719 $251,216,492 ($8,699,227) 96.7%
Revenues over Expenditures Revenues over Expenditures $5,393,522 $12,004,932 $2 Million added to Restricted by State Statute and$10 Million added to Assigned Fund Balance
1
2
As indicated on the above, General Fund revenues exceeded expenditures by$5.3 million for FY 2021-22. Additionally,
the bottom line highlighted in green indicates a budgetary savings of$12 million in FY 2021-22.This $12 million is
recommended to fund a December 13, 2022 Budget Amendment while achieving the County's current 16% Fund Balance
Policy.The major budget versus actual variances are explained herein.
FY 2021-22 General Fund- Budget versus Actual Results
Property Tax
Property tax favorable budget versus actual variance is a result of higher than budgeted collection rate. The budget
assumed a 98.7% collection rate, and the Tax Administration Office posted a 99.4%collection rate. The County took a
careful posture as this budget represented a revaluation year. Programs like the Long-Time Homeowners Tax Relief is
another example of Federal ARPA relief and the favorable impact on the local economic base. Additional budget versus
actual factors included additional natural growth and higher Motor Vehicle assessments.
Sales Tax
Sales tax favorable budget versus actual variance is due to several factors including the higher pricing on goods and
services.The 2% local option tax (Articles 39, 40 and 42) applies to food and the food price index has exceeded the
consumer price index during the current inflationary period.This coupled with impacts from the Federal Stimulus relief to
residents and sustained e-commerce are part of the favorable revenue variance explanation. Another factor is the Hold
Harmless Sales tax which replaced the State Medicaid revenue. The Hold Harmless exceeded the budget by$3 million
with the remaining Articles 39, 40 and 42 accounting for$5.6 million over the budget. The NC State Treasurer has
previously stated that local governments exercise conservative forecasting on the Hold Harmless sales tax revenue.
General Fund Expenditures
All of the Functional Leadership Teams were within the Board authorized budgets. The Budget versus Actual
variance was 96.7%. This variance was primarily attributed to salary attrition and secondarily due to contractual
obligations and other related non-personnel savings. The FY 2021-22 Budget included a $3 million attrition
target which was exceeded. The 96.7% budget versus actual expenditure savings has been consistent with prior
fiscal years.
FY 2021-22 Estimated Fund Balance Classifications
The FY 2021-22 Fund Balance classification has been reviewed with the County's Audit Managing Partner and
should be consistent with the FY 2022 Annual Comprehensive Financial Report (ACFR) to be presented at the
December 13, 2022 BOCC meeting.
2
3
FY 2022 Estimated
Fund Balance Classifications
Non-Spendable $ 51,529
Restricted by State Statute $ 18,669,724
Committed $ 7,543,841
Assigned $ 14,608,888
Unassigned $ 40,445,676 16.7%
Total Fund Balance $ 81,319,658
Similar to the prior fiscal year, the amounts above the current 16% Unassigned Fund Balance provide additional
funding opportunities for a mid-year FY 2022-23 Budget Amendments from the Assigned Fund Balance at the
December 13, 2022 BOCC meeting. As part of the County's long-term financial planning, funding allocations for
School Capital Reserves and County Capital Reserves are recommended for this year's prioritization. The
recommended funding to these reserves supports a request by the School Capital Work Group to find
additional funding for the Schools Capital Improvement Plan (CIP). Pay-As-You-Go (PAYGO) is an established
funding mechanism for governments to support their CIPS. The use of fund balance above the 16% stipulated
policy conform to the non-recurring nature of these revenue and expenditure streams. The mid-year Budget
Amendment will include seeding funds for a new Debt Service Fund and reserve. The new Debt Service Fund
reserve will serve as a rate stabilization fund to blunt a portion of the required tax rate to fund the Schools CIP
requirements.
Finally, following future years financial audit results, we are recommending a formal fund balance flow of funds
for funds above the unassigned fund balance policy target. This new policy is being drafted as part of the FY
2023-24 Budget development process.
cc: Bonnie Hammersley, County Manager
Travis Myren, Deputy Manager
Kirk Vaughn, Budget Director
Rebecca Crawford, Deputy Finance Director
3