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HomeMy WebLinkAboutAgenda 11-18-2025; 12-1 - Information Item - Memorandum - Financial Report- First Quarter FY 2025-26 and FY 2024-25 Unaudited Results 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: November 18, 2025 Re: Financial Report- First Quarter FY 2025-26 and FY 2024-25 Unaudited Results This first quarter report highlights impacts on intergovernmental grant revenues from the Federal shutdown. Included in this report is the unaudited FY 2024-25 unaudited General Fund. The FY 2024-25 audited results is being scheduled for Board presentation in January 2026. In summary, the County closed FY 2024-25 in compliance with the 16% unassigned fund balance policy; with revenues of$292.2 million and expenditures of $290.4 million (See page 8). Economic Report UNC-Charlotte Economic Forecast- Dr. Jonathan Connaughton FY 2025-26 Intergovernmental Revenues Budget versus Actuals The overall Intergovernmental for the first quarter FY 2025-25 budget versus actual revenues are 10.8% compared to 9.9%the prior fiscal year; the Federal government shutdown started October 1, 2025, and therefore grant revenue were not impacted through the County's first quarter. For purposes of Intergovernmental revenue variance analyses, delays in revenue are described as a timing variance and cancellations in revenues are described as a performance variance. Key intergovernmental grant revenue updates for the County departments of Social Services, Health and Housing are below. The second quarter reporting will be insightful in assessing impacts from a prolonged Federal shutdown and potential legislative and legal outcomes. Note: The County Dashboard now has Final FY 2024-25 Federal and State Funding Awards and Grants 1 2 Social Services Grant Revenue- FY 2025-26 budget versus actual is 8.94% compared to 8.25%the prior fiscal year. The Supplemental Nutritional Assistance Program and Medicaid revenues. The revenue performance and subsequent community impacts are subject to the ongoing Federal Budget and legal outcomes. SOCIAL SERVICES REVENUE Original Revised Actuals %of Budget Original Revised Actuals %of Budget CHILD PROTECTIVE SERVICES. - STATE $142,570 $142,570 $33,899 23.78% $142,570 $142,570 $61,641 43.24% CHILD PROTECTIVE SERVICES IV-E $296,217 $296,217 $45,317 15.30% $296,217 $296,217 $72,070 24.33% FOOD NUTRITION SERVICES E&T $528,220 $528,220 $45,870 8.68% $708,119 $708,119 $109,231 15.43% SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $2,201,588 $2,201,588 $270,340 12.28% $2,074,728 $2,074,728 $506,024 24.39% FOSTER CARE STATE $140,883 $140,883 $24,222 17.19% $120,000 $120,000 $32,635 27.20% IV-E ADMINISTRATION $1,350,000 $1,350,000 $85,777 6.35% $1,451,278 $1,451,278 $212,797 14.66% LIEAP ADMIN $74,530 $74,530 $7,554 10.14% $73,136 $73,136 $127,749 174.67% MEDICAIDADMIN $4,364,544 $4,364,544 $452,642 10.37% $3,956,048 $3,956,048 $934,182 23.61° MEDICAID ADMIN CLAIMING $120,000 $120,000 $137,800 114.83% $70,000 $70,000 $18,214 26.02% TANF/WF $1,231,087 $1,231,087 $180,854 14.69% $1,231,797 $1,231,797 $426,436 34.62% WIOA GRANT FUNDS $410,494 $410,494 $80,836 19.69% $409,560 $409,560 $55,107 13.46% Note: These grant revenues above are for program and staff administration. As of the publication date Separate from the Federal Budget ramifications on long-term grant revenue; Medicaid, SNAP and TANF continue to experience funding delays. Health Grant Revenue- FY 2025-26 budget versus actual is 14.16% compared to 18.27%the prior fiscal year. The FY 2025-26 revenue lag represents a timing variance attributed to expenditure reimbursements that are primarily personnel related to this fiscal year versus non-personnel (contracts, training and other expenses) incurred in FY 2024-25 PUBLIC HEALTH REVENUE Original Revised Actuals %of Budget Original Revised Actuals %of Budget AID TO COUNTY-MATERNAL, FAMILY PLANNING $63,000 $63,000 $17,172 27.26% $63,000 $63,000 $17,172 27.26% FOOD&LODGING INSPECTION $50,000 $50,000 $0 $30,000 $30,000 $0 GENERAL MANAGEMENT- ADMINISTRATIVE COSTS $42,921 $42,921 $11,716 27.30% $42,921 $42,921 $11,716 27.30% PUBLIC HEALTH 1 $156,524 $185,202 $45,198 24.40% $64,246 $94,753 $39,804 42.01% STATE REVENUE 1 $710,196 $852,104 $186,452 21.88% $889,937 $889,937 $249,647 28.05% Note: 1. Includes Public Health Emergency Preparedness, Project Grants and Cooperative Agreements for Tuberculosis Control Programs, Immunization Cooperation Agreements, Immunization Cooperation Agreements-Covid-19, Refugee and Entrant Assistance Targeted Assistance Grants, Cancer Prevention and Control Programs for State,Territorial and Tribal Organizations, Public Health Infrastructure, Public Health Infrastructure-Local Workforce Development, HIV Prevention Activities Health, Department Based, Family Planning Services, Maternal and Child Health Services Block Grant, Public Health Nursing, Breast Cancer and Cervical Cancer Program and Healthy Community Activities. 2 3 Housing Voucher Revenue- FY 2025-26 budget versus actual is 28.3% compared to 20.2%the prior fiscal year. The positive variance is attributed to more timely remittance of housing vouchers this fiscal year compared to the prior fiscal year. HOUSING VOUCHER REVENUE Original Revised Actuals %of Budget Original Revised Actuals %of Budget $8,636,500 $8,636,500 $2,449,037 28.36% $7,542,500 $7,618,131 $1,542,485 20.25% Note: The HOME Program funding is being monitored for any potential cancellations next fiscal year. This program provides funding for community agencies for development and acquisition of affordable housing, repair/rehabilitation, down payment assistance, and tenant-based rental assistance. FY 2025-26 General Fund-First Quarter FY 2026 FY 2025 FYS 2026 vs 2025 GENERAL FUND Original Budget Revised Budget YTDActual* Percentage YTDActual* Percentage YTD %Variance' Property Tax $212,897,374 $212,897,374 $38,457,189 18.06% $36,019,106 17.83% $2,438,083 0.23% Sales&Use Tax $44,145,403 $44,145,403 $0 0.00% $0 0.00% $0 0.00% Licenses and Permits $242,000 $242,000 $1,340 0.55% $330 0.12% $1,010 0.43% Charges for Services $16,005,107 $16,005,107 $3,246,114 20.28% $3,094,688 20.49% $151,426 -0.21% Intergovernmental $22,313,927 $22,609,942 $2,446,888 10.82% $2,199,312 9.89% $247,576 0.93% Investment Earnings $1,800,000 $1,800,000 $479,540 26.64% $439,783 24.43% $39,757 2.21% Transfers In $665,729 $665,729 $0 0.00% $0 0.00% $0 0.00% Miscellaneous $911,775 $1,018,864 $216,443 21.24% $210,097 33.92% $6,346 -12.68% Appropriated Fund Balance $7,056,130 $7,159,931 $0 0.00% $0 0.00% $0 0.00% Total $306,037,445 $306,544,350 $44,847,514 14.63% $41,963,316 14.25% $2,884,198 Community Services $16,897,564 $16,944,892 $3,672,175 21.67% $3,526,854 21.82% $145,321 -0.15% General Government $13,540,083 $13,691,545 $2,809,879 20.52% $3,144,281 24.30% -$334,402 -3.78% Public Safety $43,592,203 $43,619,703 $9,199,541 21.09% $9,172,405 22.05% $27,136 -0.96% Human Services $55,590,648 $55,871,263 $11,400,161 20.40% $10,707,279 21.76% $692,882 -1.36% Education $116,537,541 $116,537,541 $37,429,325 32.12% $31,284,861 27.65% $6,144,464 4.47% Support Services $18,002,857 $18,002,857 $6,714,365 37.30% $6,353,114 37.13% $361,251 0.17% Transfers Out $41,876,549 $41,876,549 $0 0.00% $0 0.00% $0 0.00% Total $306,037,445 $306,544,350 $71,225,446 23.23% $64,188,794 22.22% $7,036,652 1.014$ General Fund Revenues General Fund revenues are 14.6% of budgeted revenues compared to 14.2%the prior fiscal year. This represents a timing variance due to property tax collections. During the first quarter of each fiscal year, revenues will trail expenditures and cash balance (a component of fund balance) provides an interim funding source until property tax revenues begins peak January 6 following interest and penalty assessments thereafter. • Property Tax revenues are 18% of the total Property tax budget compared to 17.8%the prior fiscal year. Real and personal taxes were due September 1, 2025. The property tax category includes real, personal, and motor vehicle taxes. The 2025 current year real and personal tax billing versus collection rate is 16.8%%compared to the 2024 current collection rate of 17.8%which is attributed to outstanding tax appeals stemming from the revaluation. The 3 4 property tax original budget accounted for a 3%tax base loss due to appeals. With 15% of appeals remaining to complete, the total value change is at .79%well within the 3% budgeted adjustment. • Motor vehicle taxes are payable on the vehicle renewal date, and the tax is based on market value of the vehicle. The State remits this tax to the County on a monthly basis. • 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 in October 2025. 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 $ Tropical Storm Chantal, which occurred in July 2025 resulted in business closures and lower sales in parts of the County's commercial base. As noted on the flowchart and table below, Articles 39 and 42 both, which are both points of delivery, correlate directly with the local economic base. Both Articles 39 and 42 provide comparison of impacts that can be attributed to Chantal as indicated by the flat growth for the month of July 2025 versus July 2024. The second quarter report will provide three months of sales tax activity for further analysis. July Sales FY 2026 versus FY 2025 FY 2026 FY 2025 %Change Methodology Article 39 $ 1,480,159 $ 1,478,163 0.14% Point of Delivery Article 40 $ 1,077,212 $ 1,024,820 5.11% State Per Capita Article 42 $ 742,194 $ 740,264 0.26% Point of Delivery July Sales FY 2025 versus FY 2024 FY 2025 FY 2024 %Change Methodology Article 39 $ 1,478,163 $ 1,356,984 8.93% Point of Delivery Article 40 $ 1,024,820 $ 1,032,728 -0.77% State Per Capita Article 42 $ 740,264 $ 681,783 8.58% Point of Delivery 4 5 Charges for services are 20.2% of the budget as compared to 20.4% the prior fiscal year consistent with historical trends. This category includes Register of Deeds Excise Stamps paid for home sales, Emergency Medical Charges for ambulance service and US Marsal Federal Reimbursement for housing federal detainees. At this juncture the other revenue categories, investment earnings and license and permits are expected to meet the budget. General Fund Expenditures General Fund expenditures are 23.2% of budgeted expenditures as compared to 22.2% the prior fiscal year which is consistent with historical spending through the first quarter. All the Functional Leadership teams are consistent with historical spending rates and there are no material variances to report or monitor at this juncture. The remaining Functional Leadership teams are consistent with historical spending rates. The second quarter report will notate any material variances are of concern. • Education appropriations are 32.1% of its budget as compared with 27.6% the prior fiscal year. School appropriations are paid to both School systems by the 151h of each month. The remaining Education budget includes School Health and Safety Contracts, Deferred Maintenance, Durham Tech Current Expense and Recurring Capital. Advances to the Chapel Hill-Carrboro City Schools accounts for the (higher percentage) timing variance. • Finance and Emergency Services are tracking Expenditures related to Tropical Storm Chantal and will be submitting claims as part of the County's reimbursement request to the Federal Emergency Management Agency (FEMA). The second quarter report will include the total Chantal expenditure for FEMA reimbursement purposes. The FEMA application is expected to be submitted by mid-January 2026. 5 6 FY 2025-26 Other Funds- First Quarter FY 2026 FY 2025 FYS 2026 vs 2025 OTHER FUNDS Original Budget Revised Budget YTD Actual* Percentage YTD Actual* Percentage YTD %Variance' 11-Debt Service Fund $34,758,357 $34,758,357 $68,989 0.20% $101,144 0.29% -$32,155 -0.09% 33-Housing Voucher Fund $8,636,500 $8,638,500 $2,449,037 28.35% $1,542,486 20.28% $906,551 8.07% 35-Emergency Telephone Fund $419,062 $419,062 $65,141 15.54% $41,055 2.80% $24,086 12.74% 37-Visitor's Bureau Fund $3,321,110 $3,227,086 $587,305 18.20% $590,226 19.30% -$2,921 -1.10% 44-Inspection Fund $1,685,115 $1,685,115 $400,827 23.79% $288,121 16.31% $112,706 7.48% 50-Solid Waste Enterprise Fund $13,695,848 $13,695,848 $1,790,616 13.07% $1,763,387 13.60% $27,229 -0.53% 53-Sportsplex Fund $5,720,578 $5,720,578 $880,092 15.38% $1,337,948 25.66% -$457,856 -10.28% 70-Employee Health&Dental Fund $19,398,408 $19,398,408 $3,193,427 16.46% $3,011,332 16.69% $182,095 -0.23% 11-Debt Service Fund $34,758,357 $34,758,357 $17,343,476 49.90% $7,511,549 21.89% $9,831,927 28.01% 33-Housing Voucher Fund $8,636,500 $8,636,500 $2,165,698 25.08% $2,021,651 26.58% $144,047 -1.50% 35-Emergency Telephone Fund $419,062 $419,062 $343,396 81.94% $99,289 6.78% $244,107 75.16% 37-Visitors Bureau Fund $3,321,110 $3,327,086 $698,818 21.00% $783,875 25.63% -$85,057 -4.63% 44-Inspection Fund $1,685,115 $1,685,511 $369,509 21.92% $362,233 20.51% $7,276 1.41% 50-Solid Waste Enterprise Fund $13,695,848 $13,695,848 $2,513,047 18.35% $4,080,828 31.47% -$1,567,781 -13.12% 53-Sportsplex Fund $5,720,578 $5,720,578 $786,414 13.75% $1,015,118 19.47% -$228,704 -5.72% 70-Employee Health&Dental Fund $19,398,408 $19,398,408 $4,791,860 24.70% $4,587,392 25.42%1 $204,468 -0.72% Sportsplex Fund Sportsplex revenues are 15.3% of budget as compared to 25.6%; this is a timing variance reflecting the recording of all first quarter Sportsplex financial transactions to the County's financial ledgers. Revenue performance is projected to meet the budget. The second quarter report will provide a more insightful budget versus actual comparison. Solid Waste Fund Solid Waste revenues are 13% of the total revenues as compared to 13.6% 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. As noted previously in the property tax section, peak collections in January, therefore the first quarter revenues of$1.7 million versus expenditures of$2.5 million is managed by cash reserves. Visitors Bureau Fund Visitors Bureau revenues are 21% of budget as compared to 25.6% the prior fiscal year. The revenue versus expenditure lag will be reviewed and monitored closely to ensure a correction to achieve breakeven financial results. Occupancy rates are expected to remain flat coupled with 2% growth in average daily rooms this fiscal year. 6 7 Functional Leadership Teams by Department Community Services - Animal Services, NC Cooperative Extension, DEAPR, Economic Development, Orange Public Transportation, and 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 7 8 FY 2024-25 Unaudited General Fund Results The County General Fund closed FY 2024-25 with a net surplus of$1.6 million, driven by strong property tax collections, higher-than-expected miscellaneous revenues, and under spending across all Functional Leadership Teams. The County did not draw on fund balance and maintained the 16% unassigned fund balance policy. ORANGE COUNTY,NORTH CAROLINA FY 2024-25 GENERAL FUND(UNAUDITED) VARIANCE VARIANCE ANALYSIS REVENUES ORIGINAL BUDGET REVISED BUDGET ACTUALS % PROPERTYTAX REAL AND PERSONAL; 185,864,654 185,864,654 188,061,891 101.2% Reflects 99.4%collection rate MOTOR VEHICLE 13,775,985 13,775,985 15,192,481 110.3% Motor Vehicle price inflation DELINQUENT AND OTHER TAXES 2,358,706 2,358,706 2,089,550 88.6% Interest delinq.beer/wine&gross receipts PROPERTY TAX 201,999,345 201,999,345 205,343,922 101.7% Reflects 99.4%collection rate SALES TAX ARTICLE 39 17,856,804 17,856,804 17,381,316 97.3% Refund Impact and 1%Point of Delivery ARTICLE 40 12,503,058 12,503,058 12,310,616 98.5% Refund Impact and.5%State-wide Per Capita ARTICLE 42 8,956,144 8,956,144 8,624,367 96.3% Refund Impact and.5%Point of Delivery ARTICLE 44 323,006 323,006 317,098 98.2°% HOLD HARMLESS 4,500,000 4,500,000 5,083,983 113.0% Medicaid Hold Harmless(HH) SALES TAX 44,139,012 44,139,012 43,717,380 99.0% Refund Loss/offset by HH LICENSES AND PERMITS 274,200 274,201 208,906 76.2% Franchise cable and privilige fees. CHARGES FOR SERVICES 15,103,690 15,160,526 15,593,662 102.9% US Marshal Below by$1M&OCSO Report Copies by$300K INTERGOVERNMENTAL 22,017,818 22,899,541 21,193,528 92.6% Below by$1.7M Food Nutrition&Title IV-E Admin.(Foster) INVESTMENT EARNINGS 1,800,000 2,250,000 2,408,721 107.1% Reflects higher interest rates MISCELLANEOUS 970,011 1,048,651 2,618,675 249.7% $905K Sales Tax Refund APPROPRIATED FUND BALANCE 7,100,000 9,491,237 0 No Use of Assigned Fund Balance TRANSFERS 1,006,039 1,149,818 1,149,818 100.0% TOTALREVENUES 294,410,115 298,412,331 292,234,612 97.9% FY 2025 VARIANCE VARIANCE ANALYSIS EXPENDITURES ORIGINAL BUDGET REVISED BUDGET ACTUALS % COMMUNITY SERVICE 16,096,949 16,833,179 15,861,199 94.2% Operations and Personnel savings GENERAL GOVERNMENT 12,699,830 13,923,839 13,152,241 94.5% Operations and Personnel savings.Includes Outside Agencies. PUBLIC SAFETY 40,930,579 41,217,286 40,129,518 97.4% Operations and Personnel savings HUMAN SERVICES 53,023,027 52,835,889 47,987,423 90.8% Operations and Personnel savings.Includes Alliance Health EDUCATION 113,115,311 113,159,588 113,122,511 99.97% Current Expense,SROs and Nurses SUPPORT SERVICES 18,787,800 30,364,326 21,338,624 70.3% Revised Budget reflects non-Cash GASB 87 and 96 DEBT SERVICE 0 0 0 0.0% Moved to Debt Service Fund TRANSFERS 39,756,619 40,078,223 39,017,740 97.4% Includes Debt Service Fund Transfer TOTAL EXPENDITURES 294,410,115 308,412,330 290,609,256 94.2% TOTAL REVENUES 294,410,115 298,412,331 292,234,612 TOTAL EXPENDITURES 294,410,115 308,412,330 290,609,256 REVENUES OVER(UNDER)EXPENDITURES 1,625,356.00 8 9 cc: Travis Myren, County Manager Caitlin Fenhagen, Deputy Manager Department Directors 9