HomeMy WebLinkAboutAgenda 02-20-24; 12-4 - Information Item - Memorandum - Financial Report - Second Quarter FY 2023-24 1
ORANGE COUNTY
NORTH CAROLINA
FINANCE and ADMINISTRATIVE SERVICES
Gary Donaldson,CTP,Chief Financial Officer I gdonaldson@orangecountync.gov I PO Box 81.81,Hillsborough,NC 27278 1 919.245.2453
MEMORANDUM
To: Board of County Commissioners
From: Gary Donaldson, Chief Financial Officer
Date: February 20, 2024
Re: Financial Report- Second Quarter FY 2023-24
Please find attached a summary of FY 2023-24 second quarter financial report for the General Fund, Enterprise Funds,
and Special Revenue Funds.The revenue and economic base through the first six months of the fiscal year remains
consistent with the FY 2023-24 adopted budget. Our quarterly financial reports continue to include insights from local
economists in recognition of the important role of the economy in our financial performance. Dr.Jonathan
Connaughton's commentary below and the linked report offer additional economic performance metrics.
UNC Charlotte- Dr.Jonathan Connaughton Excerpt and Link
"Looking ahead to 2024, the report forecasts modestgrowth. North Carolina employment is expected to add 53,400 net
jobs, reaching 5,003,800 persons by December 2024, a 1.1%increase over the anticipated December 2023 employment
level.
Considering North Carolina's Gross Domestic Product, the real(inflation-adjusted)growth rate for 2024 is projected to
increase by 2.4°0.All 15 of the state's economic sectors are expected to experience output increases during 2024."
The full report and a recording of the presentation by Dr.Jonathan Connaughton is at
https://issuu.com/belkcollege/docs/economic forecast dec 2023 unc charlotte
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General Fund Summary
FY 2024 FY 2023 FYs 2024 vs 2023
GENERAL FUND Original Budget Revised Budget YTDActual* Percentage VTDActual* Percentage YTD %Variance`
Property Tax $190,759,520 $190,759,520 $150,820,333 79.06% $146,700,101 78.80% $4,120,232 0.26%
Sales&Use Tax $43,739,131 $43,739,131 $7,735,119 17.68% $7,412,747 20.81% $322,372 -3.13%
Licenses and Permits $274,200 $274,200 $57,401 20.93% $60,943 22.20% -$3,542 -1.27%
Charges for Services $14,208,193 $14,208,193 $5,778,082 40.67% $6,857,614 48.20% -$1,079,532 -7.53%1
Intergovernmental $19,686,908 $20,561,133 $6,860,373 33.37% $6,948,159 34.26% -$87,786 -0.89%
cc Investment Earnings $1,600,000 $1,600,000 $482,386 30.15% $397,742 3977.00% $84,644 -3946.85%2
Transfers In $1,391,290 $1,435,628 $0 0.00% $0 0.00% $0 0.00%s
Miscellaneous $846,286 $867,327 $640,483 73.85% $706,962 93.33% -$66,479 -19.48%
Appropriated Fund Balance $7,000,000 $7,033,256 $0 0.00% $0 0.00% $0 0.00%
Total $279,505,528 $280,478,388 $172,374,177 61.46% $169,084,268 64.97% $3,289,909 -3.51%
Community Services $15,241,917 $15,711,188 $6,692,372 42.60% $6,863,070 44.33% -$170,698 -1.73%
General Government $11,987,685 $12,215,771 $5,569,454 45.59% $7,006,631 49.87% -$1,437,177 -4.28%5
Public Safety $35,882,898 $36,173,297 $17,263,449 47.72% $15,861,038 47.73% $1,402,411 -0.01%6
a Human Services $48,541,143 $49,313,653 $21,201,741 42.99% $18,445,162 40.10% $2,756,579 2.89%7
o Education $107,805,947 $107,970,074 $57,167,579 52.95% $47,624,573 48.37% $9,543,006 4.58%8
X Support Services $18,492,107 $18,682,624 $9,451,473 50.59% $8,191,926 83.82% $1,259,547 -33.23%
Debt Service $0 $0 $0 0.00% $22,998,610 60.40% -$22,998,610 -60.40%10
Transfers Out $41,553,831 $41,553,831 $0 0.00% $0 0.00% $0 0.00%
Total $279,505,528 $281,620,438 $117,346,068 41.67% $126,991,010 51.73% -$9,644,942 -10.07%
Notes:
+-Based on percentage.
1-Lower Emergency Service(Ambulance)billings.
2-Reflects interest rate environment with portfolio yielding 5.25%.
3-The timing of the drawdown of Lottery Fund proceeds.
4-Miscellaneous includes Donations and Leases.
5-Insurance expenses now accounted for in Support Services function rather than Community Services function.
6-Higher FY 2024 expenses reflect increased overtime/off-duty Sheriff's Department expenses.
7-DSS added 9 new positions to support Medicaid expansion and expenses for Economic support Services previously funded in Non-Departmental.
8-Higher FY 2024 spend rate through 6 months reflect one month advance Chapel Hill City Schools monthly current expense for their cashflow requirements.
9-Insurance expenses now accounted for in Support Services function rather than Community Services function.
10-Debt Service for Long-Term Principal and Interest now accounted for in Debt Service Fund.
General Fund Revenues
General Fund revenues are 61.4% of budgeted revenues compared to 64.9% the prior fiscal year. The
percentage variance is primarily attributed to a higher FY 2024 budget ($1.6 million) for investment earnings
compared to the prior fiscal year. Another contributing factor to the General Fund revenue percent variance is
Emergency Service collections; the budget versus actual comparisons is indicated in the Charges for Services
section below.
• Property Tax collections are 79.06% of the total Property tax budget compared to 78.8% the prior fiscal
year; this represents a timing variance in collections. Real and personal taxes were due September 1 but
peaked at the end of December tax collections due to the pending January assessment of penalties and
interest. The FY 2023-24 Budget increased the tax rate by .46 cents from 83.12 cents to 83.58 cents per
$100 of assessed value equaling an additional $1 million in addition tax revenue to fund both County
and School continuation expenses. An important measure of the resiliency in the tax and economic base
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is the property tax billing and collection rate; the billing collection rate is currently 97% as compared to
96.5%the prior fiscal year. The final collection rate is projected to be consistent with the budgeted
amount of 99.2%for real and personal property.
• Motor vehicles taxes which is a sub-category in the Property Tax category in the table above are 52.6%
of the Motor Vehicle budget as compared to 55.3% in the prior fiscal year. The budgeted amount is
projected to be achieved here as well. The State remits this tax to the County monthly. Motor vehicle
taxes are payable on the vehicle renewal date and the tax is based on the market value of the vehicle. FY 2023-24
Motor Vehicles are $6.7 million as compared to $6.3 million the prior fiscal year.
• Sales Tax for Articles 39, 40, 42 and Hold Harmless amounts are recorded in the General Fund. The year-
to-date sales tax has increased by 4% compared to the same period last year. This is a marked difference
from the 22% increase in the same period from the prior fiscal year. This slower rate of growth was
factored into the budget and attributed to reduced inflation. It is important to notate the three-month
lag in collections; the second quarter report only accounts for three months of sales tax collections, this
lag was illustrated in the first quarter report.
• Charges for services are 40.6% of the budget as compared to 48.2%the prior fiscal year. Two key
revenue sources in this category are Emergency Charges and Register of Deeds Excise Stamps. This
percent decline is attributed primarily to Emergency Medical Charges (Ambulance billings).
Emergency Medical Charges. Emergency Medical Charges collections are $2 million or 38.6% of budget
as compared to $2.9 million or 77.6% the prior fiscal year. Staff is in discussion with the Tax Office and
Emergency Services to determine how much of this decline is due to timing versus performance, and
requisite corrective actions.
Excise Stamps (Real Estate Transfers). Excise Stamps have decreased to $718,598 or 56% of the budget
compared to $792, 259 or 45.3% of the budget through the second quarter in the prior fiscal year.
These real estate transfers are recorded each month and they reflect the number of real estate
transactions and sales.
• Investment Earning returns to date are $482,386 compared to $397,742 the prior year. The County's
investment policy emphasizes Safety, Liquidity and Yield in that priority order. The investment portfolio
consist primarily of U.S. Treasuries, Federal Agencies, and Overnight Repurchase Agreements which are
all highly rated securities and comply with the North Carolina Permitted Investments statutes. The
investment portfolio is currently yielding 5.25%, which is consistent with the prior fiscal year. The higher
idle cash balances have been invested in the aforementioned securities to meet the projected budget.
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General Fund Expenditures
General Fund expenditures are 41.6% of budgeted expenditures as compared to 51.7% the prior fiscal year.
The lower percentage this year reflects debt service now being accounted for in the Debt Service fund.
Personnel expenses within the Public Safety Function is being monitored further and as described below.
• General government represented 45.5% of total general government as compared to 49.8% the prior
fiscal year. The percent decline is due to Insurance premiums now being accounted for in the Support
Services function.
• Support Services represented 50.9% of total support services as compared to 83.8%. This is not a
performance variance but represents shifting of the budget from the wage related expenses being
shifted non-departmental account to departments' accounts.
• Public Safety percentage spend rate at the function level remains the same at 47% of budget for this
fiscal year and the prior year. Staff is reviewing spending and reimbursable funding for overtime/off-
duty shifts in the Sheriff's Office as spending has exceeded the allotted budget by nearly $1 million.
• Human Services function is $2.7 million higher than the prior fiscal year. This higher expense includes 9
additional Department of Social Service positions for Medicaid Expansion and other Economic Support
expenses.
• The remaining Functional Leadership teams are consistent with historical spending rates.
• Education appropriations are 52.9% of its budget as compared with 48.3% the prior fiscal year. School
appropriations are paid to both School systems by the 151h of each month. However, the higher
percentage for this fiscal year reflects the County advancing current expenses to the Chapel-Hill City
Schools to support their cashflow as the district awaited an inflow of the CHCCS special district property
tax revenue. The remaining Education budget includes School Health and Safety Contracts, Deferred
Maintenance, Durham Tech Current Expense and Recurring Capital.
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Summary of Other Funds
FY 2024 FY 2023 FYs 2024 vs 2023
OTHER FUNDS Original Budget Revised Budget YTDActual* Percentage YTDActual* Percentage YTD %Variance`
11-Debt Service Fund $37,457,498 $37,457,498 $20,417,773 S4.51% $0 0.00% $20,417,773 54.51%11
33-Housing Fund $6,858,632 $7,004,886 $2,293,989 32.75% $2,812,035 56.60% -$518,046 -23.85%12
a 35-Emergency Telephone Fund $571,016 $578,160 $247,556 42.82% $196,164 25.30% $51,392 17.52%
w 37-Visitor's Bureau Fund $2,716,666 $2,724,577 $1,274,577 46.78% $1,299,192 54.40% -$24,615 -7.62%
w 44-Inspection Fund $1,609,483 $1,609,483 $565,857 35.16% $0 0.00% $565,857 35.16%13
cc 50-Solid Waste Enterprise Fund $12,693,308 $12,693,308 $8,862,694 69.82% $8,174,214 69.30% $688,480 0.52%
53-Sportsplex Fund $4,696,687 $4,696,687 $2,5S3,749 54.37% $1,962,845 46.98% $590,904 7.39%14
70-Employee Health&Dental Fund $16,251,634 $16,251,634 $6,229,457 38.33% $5,621,984 36.52% $607,473 1.81%
11-Debt Service Fund $37,457,498 $37,457,498 $20,417,773 54.51% $0 0.00% $20,417,773 54.51%11
33-Housing Fund $6,858,632 $7,004,886 $3,308,911 47.24% $2,774,938 55.86% $533,973 -8.62%12
v 35-Emergency Telephone Fund $571,016 $598,060 $212,817 35.58% $220,127 28.39% -$7,310 7.19%
37-Visitor's Bureau Fund $2,716,666 $2,724,577 $1,658,716 60.88% $1,303,585 54.61% $355,131 6.27%
044-Inspection Fund $1,609,483 $1,609,483 $649,835 40.38% $0 0.00% $649,835 40.38%13
X
++ 50-Solid Waste Enterprise Fund $12,693,308 $12,693,308 $5,732,141 45.16% $6,046,500 47.04% -$314,359 -1.88%
53-Sportsplex Fund $4,696,687 $4,772,593 $2,015,984 42,24% $1,909,380 44.88% $106,604 -2.64%
70-Employee Health&Dental Fund $16,251,634 $16,251,634 $6,051,379 37.24% $4,959,918 32.22% $1,091,461 5.02%
Notes:
+-Based on percentage.
11-New Debt Service Fund;FY 2023 debt service posted after the second quarter.
12-Reflects timing variance from Housing Urrban Development to reimburse Housing
13-New Inspection Fund;FY 2023 Inspection fees were posted in General Fund through the second quarter.
14-Improved revenues for Ice Rink,Membership,Fieldhouse and Kidsplex.
Sportsplex Fund
Sportsplex revenues are at $2.5 million or 54.3% of budget as compared to $1.9 million or 46.9% the prior fiscal
year. The Sportsplex overall program revenues have increased from the prior fiscal year.
Ice Rink revenues are $1 million compared to $732,434 the prior fiscal year. Sports Aquatics revenues are
$326,578 compared to $309,445 the prior fiscal year. Sports Kidsplex are $336,023 compared to $183,645 the
prior fiscal year. Membership and Fitness fees are $711,154 compared to $560,015 the prior fiscal year.
Fieldhouse revenues are $201,122 compared to $117,233 the prior fiscal year. The Sportsplex expenses are $2
million or 42% of budget compared to $1.9 million or 44.8%the prior year. Consistent with enterprise funds the
fund is on track to be self-supporting this fiscal year.
Solid Waste Fund
Solid Waste revenues are $8.8 million or 69.8% of the budget as compared to $8.1 million or 69.3% of the
budget in the prior fiscal year. The solid waste program fee of$142 is billed as a line item on the Property Tax
bill. Peak fee collections occur by the end of December. Solid waste expenditures are $5.7 million or 45% of
expenditures as compared to $6 million 47% the prior fiscal year. Consistent with enterprise funds the fund is
on track to be self-supporting this fiscal year.
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Staff is monitoring the Housing funds and Finance is assisting Housing staff on grant reimbursement drawdowns
as we near the close of the fiscal year. The new Inspections Fund and Debt Service Fund are consistent with the
budget.
Functional Leadership Teams by Department
Community Services - Animal Services, NC Cooperative Extension, DEAPR, Economic Development, Orange
Public Transportation, Planning and Inspections.
General Government- Board of Elections, Clerk to the Board, County Attorney, County Manager, Register of
Deeds and Tax Administration
Public Safety—Courts, Emergency Services, Criminal Justice Resource Department, and Sheriff's Office
Human Services— Department on Aging, Child Support, Housing, Human Rights, and Community Development,
Library, Public Health and Social Services
Support Services-Asset Management Services, Community Relations, Finance, Human Resources, and
Information Technology
cc: Bonnie Hammersley, County Manager
Travis Myren, Deputy County Manager
Kirk Vaughn, Budget Director
Department Directors
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