HomeMy WebLinkAboutAgenda - 02-25-2025; 12-2 - Information Item - Memorandum - Financial Report- Second Quarter FY 2024-25 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 272781 919.245.2453
INFORMATION ITEM
To: Board of County Commissioners
From: Gary Donaldson, Chief Financial Officer
Date: February 20, 2025
Re: Financial Report- Second Quarter FY 2024-25
This FY 2024-25 Second Quarter Financial report provides Budget versus Actual comparisons to the prior fiscal
year (pages 1-6).
The following December 2024 economic reports provide insightful data and trends as a complement to the
County financial report:
Dr. John Connaughton's UNC Charlotte Economic Report
Dr. Michael Walden's NC State Economic Report
The American Rescue Plan Act (ARPA) spending graphic on page 7 indicates that the County has spent 80% of
our $28.8 million allocation. The remaining 20% pertains to the Broadband initiative with $4 million of the $10
million spent. The ARPA deadline for this remaining expenditure is December 31, 2026.
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FY 2025 FY 2024 FYS 2025 vs 2024
GENERAL FUND Original Budget Revised Budget YTDActual* Percentage YTDActual* Percentage YTD %Variance'
Property Tax $201,999,345 $201,999,345 $158,516,212 78.47% $150,820,333 79.06% $7,695,879 -0.59%
Sales&Use Tax $44,139,012 $44,139,012 $7,939,368 17.99% $7,735,119 17.68% $204,249 0.31%
Licenses and Permits $274,200 $274,200 $55,757 20.33% $57,401 20.93% ($1,644) -0.60%
v Charges for Services $15,103,690 $15,106,609 $6,273,293 41.53% $5,778,082 40.67% $495,211 0.86%
vIntergovernmental $22,017,818 $22,499,290 $7,051,460 31.34% $6,860,373 33.37% $191,087 -2.03%
Investment Earnings $1,800,000 $1,800,000 $952,322 52.91% $482,386 30.15% $469,936 22.76%
°C Transfers In $1,006,039 $1,149,818 $0 0.00% $0 0.00% $0 0.00%
Miscellaneous $970,011 $1,007,747 $485,509 48.18% $640,483 73.85% ($154,974) -25.67%
Appropriated Fund Balance $7,100,000 $7,441,586 $0 0.00% $0 0.00% $0 0.00%
Total $294,410,115 $295,417,607 $181,273,921 61.36% $172,374,177 61.46% $8,899,744 -0.10%
Community Services $16,096,949 $16,432,210 $7,469,719 44.59% $6,692,372 42.60% $777,347 1.99%
General Government $12,699,830 $12,806,847 $6,429,647 48.88% $5,569,454 45.59% $860,193 3.29%
v Public Safety $40,930,579 $40,971,477 $18,501,731 44.81% $17,263,449 47.72% $1,238,282 -2.91%
Human Services $53,023,027 $53,455,448 $22,291,819 43.80% $21,201,741 42.99% $1,090,078 0.81%
Education $113,115,311 $113,115,311 $71,851,233 63.51% $57,167,579 52.95% $14,683,654 10.56%
o. Support Services $18,787,800 $18,872,800 $10,470,141 59.32% $9,451,473 50.59% $1,018,668 8.73%
W Debt Service $0 $0 $0 0.00% $0 0.00% $0 0.00%°Transfers Out $39,756,619 $39,763,514 $0 0.00% $0 0.00% $0 0.00%
Total $294,410,115 $295,417,607 $137,014,290 46.85% 1$117,346,068 41.67% $19,668,222
General Fund Revenues
General Fund revenues for this fiscal year are on target at 61.4% matching last year's budget versus actual
percentage as well. Given the new Administration's review of Federal grant revenues, this category is being
monitored and coordinated with departments to ensure reimbursable expenses are timely drawn down within the
fiscal year.
• Property Tax collections are 78.4% of the total Property Tax budget compared to 79.06%the prior fiscal year.
Real and personal property tax collections will peak by January 5 when penalties and interest begin to accrue on
late payments. The property tax revenue growth reflects a tax rate increase of 2.81 cents to 86.34 cents per$100 of
assessed value. This tax increase is dedicated to continuation expenses of both school districts. The other
component of the property tax revenue growth is attributed to natural growth from new construction and
improvements. The collection rate assumption of 99.2%for real property is expected to be achieved.
• Motor vehicle taxes are payable on the vehicle renewal date and the tax is based on market value of the vehicle.
The North Carolina Department of Revenue remits this tax to the County monthly. Registered Motor Vehicle Taxes
become delinquent after 30 days.
• The Sales Tax category is comprised of Article 39 (1% point of sale), Article 40 (.5%State-wide per capita) , Article
42 (.5% point of sale) and Hold Harmless. Article 40 to date has been flat. Article 40 is designed to ensure equitable
distribution to counties regardless of their commercial activity levels. Hurricane Helene has been a factor in Article
40 showing no growth to date. Articles 39 and 42 which are point of sale has increased at 2.6%from the prior. The
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overall sales tax growth rate has slowed significantly from the last three fiscal years. Following the pandemic, there
was an initial surge in consumer spending due to pent-up demand and federal stimulus support. Then the
subsequent increase in consumer prices was a factor as well. As these factors wane, pending levels have normalized,
contributing to the slower sales tax revenue growth.
Sales Tax has a three-month revenue lag from the NC Department of Revenue (NCDOR) with the first month of July
collections to be received by local governments by October 15. The flowchart below illustrates this three-month lag.
Sequencing of Local Sales Tax Collections & Receipt
July = Sale Aug. = Vendor Sept. = DoR Oct. 15 = County
submits report reconciles receives $
Charges for services are 41.5% of the budget as compared to 40.6% in the prior fiscal year. Federal Marsal
Inmate fees are $574,898 or 22.1% of budget compared to $1 million or 46.9%the prior fiscal year; this budget
is unlikely to be achieved. Emergency Medical Charges for ambulance services are at $2.5 million or 48.4% of
budget compared to $2 million or 38.5%the prior fiscal year. The Charges for Services category also includes
Register of Deeds Excise Stamps paid on real estate transactions and Emergency Medical Charges for
ambulance services.
Intergovernmental revenue is a key category given the Administration's executive orders. As of December 31,
2025, Intergovernmental revenues are at $7 million or 31.3% of budget compared to $6.8 million or 33.3% the
prior fiscal year. Staff will work closely with key departments to monitor exposure and deploy best practices
including 1) submitting reimbursements as soon as possible 2) working with state agencies on pass-through
grants and 3) establish strong audit trails with supporting documentation. The Human Services departments,
which include Social Services, Health and Housing, are the most susceptible in this uncertain period. The initial
and now rescinded OMB memorandum did not apply to ARPA or Opioid funds.
Investment earnings are on target to meet the budget at $952,322 or 52% of budget compared to the prior
fiscal year budget to actual percentage of 30.1%. The investment policy emphasizes Safety, Liquidity and Yield in
that priority order. The portfolio is within the North Carolina statutory permitted investments of a high credit
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quality. The yield rate as of December 31,2024, was 4.34%.compared to 5.38% on December 31, 2023. This
decline is commensurate with Federal Reserve actions. The portfolio composition is indicated below.
December 31, 2024
■Overnight Repo
■Term Repo
■Fixed Rate Agencies
Floating Rate Agencies
Fixed Rate Treasuries
■Floating Rate Treasuries
General Fund Expenditures
General Fund expenditures are 46.8% of budgeted expenditures as compared to 41.6% the prior fiscal year.
The higher variance is primarily due to the County advancing the Chapel Hill-Carrboro City School (CHCCS)
district their current expense amounts in the second quarter, as CHCCS awaited their Special Tax District
revenues.
All the Functional Leadership teams' expenditures are consistent with historical spending rates except Support
Services. Support Services includes insurance upfront payments.
The second quarter report will notate any material variance areas of concern.
• Education appropriations are 63.5% of its budget as compared with 52.9% the prior fiscal year, again
due to upfront current expense appropriations to CHCCS. The remaining Education budget includes
School Health and Safety Contracts, Durham Tech Current Expense and Recurring Capital.
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Summary of Other Funds
Management is closely monitoring the Housing Funds in view of the new Administration executive orders.
Finance meets regularly with Housing staff to ensure that drawdowns occur in a timely way to eliminate any
major lags between expenses and reimbursable revenue.
The Inspection Fund revenues are lagging expenses and requires monitoring for subsequent budget
amendments. An RFP fee study has been issued to review cost recovery opportunities.
Transfers From the General Fund to the Debt Service Fund
Property tax transfers from the General Fund to the Debt Service Fund are timed to occur as the County
reaches peak tax collections. This is anticipated to be the regular timing of flow of funds each fiscal year to meet
debt service requirements.
FY 2025 FY 2024 FYs 2025 vs 2024
OTHER FUNDS OriginalBudget Revised Budget VTDActual* Percentage VTDActual* Percentage VTD %Variance
11-Debt Service Fund 34,322,203 34,322,203 202,288 0.59% $20,417,773 54.51% $20,215,485 -53.92%
33-Housing Fund $7,542,500 $7,606,396 $3,619,089 47.58% $2,293,989 32.75% $1,325,100 14.83%
35-Emergency Telephone Fund $428,404 $1,501,846 $188,683 12.56% $247,556 42.82% ($58,873) -30.26%
37-Visitor's Bureau Fund $3,058,121 $3,270,163 $1,354,818 41.43% $1,274,577 46.78% $80,241 -5.35%
38-Spay/Neuter Fund $0 $0 $0 0.00% $0 0.00%
44-Inspections Fund $1,766,217 $1,766,217 $526,829 29.83% $565,857 35.16% ($39,028) -5.33%
50-Solid Waste Enterprise Fund $12,967,288 $13,197,288 $8,114,170 61.48% $8,862,694 69.82% ($748,524) -8.34%
53-Sportsplex Fund $5,214,172 $5,214,172 $2,765,313 53.03% $2,553,749 54.37% $211,564 -1.34%
70-Employee Health&Dental Fund $18,045,547 $18,045,547 $6,662,164 36.92% $6,229,457 38.33% $432,707 -1.41%
11-Debt Service Fund $34,322,203 $34,322,203 $20,813,816 60.64% $20,417,773 54.51% $396,043 6.13%
33-Housing Fund $7,542,500 $7,606,396 $4,874,027 64.12% $3,308,911 47.24% $1,565,116 16.88%
35-Emergency Telephone Fund $428,404 $1,501,846 $95,033 88.46% $212,817 35.58% ($117,784) 52.88%
37-Visitor's Bureau Fund $3,058,121 $3,270,163 $1,645,342 57.74% $1,658,716 60.88% ($13,374) -3.14%
�-a 38-Spay/Neuter Fund $0 $0 $0 0.00% $0 0.00% $0 0.00%
y 44-Inspections Fund $1,766,217 $1,766,217 $737,077 41.73% $649,835 40.38% $87,242 1.35%
Lx 50-Solid Waste Enterprise Fund $12,967,288 $13,197,288 $4,913,323 45.85% $5,732,141 45.16% ($818,818) 0.69%
53-Sportsplex Fund $5,214,172 $5,214,172 $2,209,245 42.37% $2,015,984 42.24% $193,261 0.13%
70-Employee Health&Dental Fund $18,045,547 $18,045,547 $9,044,106 50.12% $6,051,379 37.24% $2,992,727 12.88%
Sportsplex Fund
The Sportsplex revenue sources are Ice Rink (35% of budget), Membership and Fitness (26% of budget), Sports
Aquatics (13% of budget), Sports Kidsplex (12% of budget), and Field House (7% of budget). Reserves and
investment income comprise the remaining funding sources. Sportsplex revenues are 53% of budget and
consistent with the prior year revenue collections. Expenditures budget versus actuals are 42% of budget.
Revenues exceed expenditures by $556,068 indicating sound financial performance.
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Solid Waste Fund
Solid Waste revenues are 61.4% of the total revenues as compared to 69.8% in the prior fiscal year. The solid
waste program fee of$138 is billed as a line item on the Property Tax bill, therefore the solid waste collection
performance will generally mirror the property tax collection performance with peak collections in
December/January. Revenues soundly exceed expenditure by $3.2 million again due to the upfront revenue
collections, the margins will narrow by the end of the fiscal year.
Visitors Bureau Fund
Visitors Bureau revenues are 41.4% of budget as compared to 46.7%the prior fiscal year. The revenue versus
expenditure lag is a timing variance, as the advertising budget is primarily paid upfront. The hotel/motel lodging
revenue base has continued to perform well as measured by Gross Lodging revenues, Occupancy rates and
Average Daily Room rates. The County occupancy tax rate is set at 3% on the gross receipts from the rental of
any room, and lodging or similar accommodation in the County subject to sales tax under G.S. 105-164.4(a)(3).
Remittances are due to the Tax Office by the 1511 of each month. Revenues lag expenditures by$290,524 due
to the current spending rate on advertising.
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AMERICAN RESCUE PLAN ACT (ARPA)
ARPA FUNDS SPENT AS OF DECEMBER 31, 2024
Broadband DestgLi and Im lementation
000 000 or 40', spent
Street Outreach, Harm Reduction, and Deflection SOHRAD
spent
Fire district radios
$12,408,201 . spent
Government Alliance on Racial Equity Youth Program
$26,500 . spent
ARPA Coordinator
$93,850 or 0'. spent
Revenue Re lacement: Emer enc Housin Assistance (EHA)
$9,329,370 o 99Yo . -
Emergency Housing Assistance
O'. spent
0% 20% 40"/0 60% 80% 100%
*As of December 31, 2024 80% of the$28.8 million has been spent.
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Functional Leadership Teams by Department
Community Services -Animal Services, NC Cooperative Extension, DEAPR, Economic Development, Orange
Public Transportation and Planning.
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.
Acknowledgments to the Budget and Accounting Offices.
cc: Travis Myren, County Manager
Cait Fenhagen, Interim Deputy Manager
Department Directors
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