HomeMy WebLinkAboutAgenda 05-19-2026; 12-3 - Information Item - Memorandum Regarding Financial Report - FY 2025-26 Third Quarter ORANGE COUNTY
NORTH CAROLINA
FINANCE and ADMINISTRATIVE SERVICES
Gary Donaldson,CTP,Chief Financial Officer I gdonaldson@orangecountync.gov 1 131 W.Margaret Ln,Hillsborough,NC 27278 1919.245.2453
MEMORANDUM
TO: Board of County Commissioners
FROM: Gary Donaldson, Chief Financial Officer
DATE: May 19, 2026
RE: Financial Report- FY 2025-26 Third Quarter
This Third Quarter Financial Report compares Budget versus Actual to assess any financial risk in the General Fund, Enterprise
Funds and Special Revenue Funds. Regarding remaining the ARPA Fund,the County has spent$28 million of the total$28.8
million ARPA allocation.There remains$800,000 in funds allocated to Broadband.The County is working with Lumos to
determine remaining application of the funds prior to the U.S.Treasury December 31, 2026, Expenditure deadline.
The General Fund is projected to end with no use of fund balance with revenue and expenditure trends consistent with prior
year performance with favorable budget versus actual performance through March 31, 2026.
FY 2026 FY 2025 FYs 2026 vs 2025
GENERAL FUND Original Revised YTDActuol* Percents YTD Actual* Percents YTD
Property Tax $212,897,374 $212,897,374 $210,988,790 99.10% $198,389,673 98.21% $12,599,117 0.89%
Sales&Use Tax $44,145,403 $44,145,403 $26,659,321 60.39% $28,353,019 64.24% -$1,693,698 -3.85%
Licenses and Permits $242,000 $242,000 $89,979 37.18% $106,115 38.70% -$16,136 -1.52%
Charges for Services $16,005,107 $16,062,607 $10,220,489 63.63% $10,048,537 66.43% $171,952 -2.80%
Intergovernmental $22,313,927 $23,238,519 $11,991,333 51.60% $12,262,299 53.78% -$270,966 -2.18%
s Investment Earnings $1,800,000 $1,800,000 $1,788,660 99.37% $1,610,395 89.47% $178,265 9.90%
Miscellaneous $911,775 $1,069,307 $884,222 82.69% $682,290 67.50% $201,932 15.19%
Appropriated Fund Balance $7,056,130 $9,380,503 $0 0.00% $0 0.00% $0 0.00%
Transfers In $665,729 $794,990 $0 0.00% $0 0.00% $0 0.00%
Total $306,037,445 $309,630,703 $262,622,794 84.82% $251,452,328 84.48% $11,170,466 0.34%
Community Services $16,897,564 $17,391,309 $11,451,245 65.84% $11,452,550 67.01% -$1,305 -1.17%
2 General Government $13,540,083 $14,006,217 $9,494,904 67.79% $9,672,505 73.14% -$177,601 -5.35%
Y Public Safety $43,592,203 $43,794,024 $29,618,584 67.63% $29,137,743 70.37% $480,841 2.74%
Human Services $55,590,648 $56,900,087 $36,820,908 64.71% $35,168,766 65.46% $1,652,142 -0.75%
x Education $116,537,541 $116,574,129 $95,207,683 81.67% $92,338,483 81.60% $2,869,200 0.07%
W Support Services $18,002,857 $18,772,191 $16,077,504 85.65% $15,476,983 80.56% $600,521 5.09%
Transfers Out $41876 549 $42,192,745 $0 0.00% $0 0.00% $0 0.00%
Total 1$306,037,445 $309,630,702 $198,670,828 64.16% 1$193,247,030 64.92%1 $5,423,798 -0.76%
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General Fund
General Fund revenues are 84.8%of budgeted revenues are the same percentage rate the prior fiscal year.There remains no
indicative risk pertaining to the Intergovernmental revenue through March 31, 2026. Property taxes and interest income have
been strong and provides an offset to sales tax.Sales Tax Medicaid Hold Harmless is expected to meet the budget unlike Article
39,40 and 42 due to higher than anticipated sales tax refunds from the North Carolina Department of Revenue.
• Property Tax collections include Real, Personal and Motor Vehicles. Real and personal taxes collections peaked at the
end of December prior to the January assessment of penalties and interest and has met the budgeted revenues.
Property tax revenues have met the budget projections for the fiscal year.The Tax Administration Office billing and
collection rate will meet the 99.2%budgeted amount. Real and Personal tax revenues are$210.9 million.The remaining
property taxes represent the last three months of motor vehicle tax revenues to meet the overall property tax budgeted
amount of$212.8 million.The State remits motor vehicle tax revenues to the county monthly.
• Sales tax revenues are 60.39%of the budget compared to 64.24%the prior fiscal year.The Hold Harmless sales tax
revenues was budgeted conservatively at$4.8 million in FY 2025-26 due to increased State Medicaid expenditures.The
County is projecting to meet the Hold Harmless budgeted amount.Articles 39,40 and 42 through seven months of
collections is averaging 5%despite a significant non-profit refund.
Note:Sales Tax has a three-month revenue lag from the NC Department of Revenue(NCDOR).The last month of sales
tax for FY 2025-26 will be received by September 15, 2026.
Seven Months of Collections
FY 2025-26 FY 2024-25 $Change %Change Collections Basis
Article 39 $ 10,095,654 $ 9,584,430 $511,224 5.33% Point of Sale
Article 40 $ 7,393,266 $ 7,075,995 $317,271 4.48% State Per Capita
Article 42 $ 5,061,998 $ 4,807,625 $254,373 5.29% Point of Sale
Average 5.04%
• Intergovernmental revenues are 51.6%of budgeted revenues as compared to 53.7%in the prior fiscal year.The
percentage received to date has historically trailed the budget through the third quarter as noted in the table below:
Table 1: Federal and State Grants Trend
Fiscal Year Intergovernmental Revenue
Third Quarter
2025-26 51.6%
2024-25 53.7%
2023-24 55.5%
2022-23 50.3%
2021-22 53.2%
2020-21 59.7%
2019-20 50.6%
The intergovernmental revenue trend above is attributed to the historical timing lag for Department of Social Services claim
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reimbursements. During the 2026 legislative session,the North Carolina General Assembly enacted a supplemental Medicaid
appropriation of approximately$319 million to address a projected shortfall and ensure program continuity through the end of
this fiscal year.This action reflects continued State commitment to Medicaid funding,while also highlighting ongoing cost
pressures driven by enrollment growth, inflation, and high-cost pharmaceuticals.Though Medicaid service costs remain funded
by federal and State sources, counties continue to bear administrative responsibilities.
• Investment Earnings are$1.7 million through the third quarter compared to the budget of$1.8 million.This budget will
be met by the fiscal year end.The County's investment policy emphasizes safety, liquidity, and yield, in that priority
order.The investment portfolio consists 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 portfolio yield as of March 31ST was 3.57%which reflects the Federal Reserve's last rate reduction last December.
March 31, 2026
■Overnight Repo
■Term Repo
■Fixed Rate Agencies
Floating Rate Agencies
■Fixed Rate Treasuries
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General Fund expenditure is 64.1%of budget,as compared to 64.9%the prior fiscal year despite the
Support Services spending rate for unforeseen facilities repairs.This spend rate trend is consistent with
historical spend rate, and any variances can be attributed to timing and not performance variance.
• Human Services third quarter expenditures represented $36.8.1 million or 64.7%of the functional
budget as compared to$35.1 million or 65.4%the prior fiscal year. Personnel expenses for Social
Services, Medicaid administrative support, Health and Housing Community Development are the
primary drivers.
• Public Safety expenditures represented $29.6 million or 67.6%of the functional budget as
compared to$29.1 million or 70.3%the prior fiscal year.Sheriff's Office and Emergency Services
comprise the largest share of expenditures. Contract services in the Sheriffs Office is$654,588 as
compared to$1,064,078 the prior fiscal year contributing to the favorable variance to date.
• Support Services expenditures represented 85.3%of the functional budget as compared to 80.5%
in the prior fiscal year.This variance is attributed primarily to additional increases for building
repairs and contract services for HVAC and Mechanical in Asset Management Services.
• Education expenditures represented 81.6%of its budget like the prior fiscal year. School
appropriations are generally paid to both School districts by the 15th of each month.The Education
budget includes School Health and Safety Contracts, Deferred Maintenance, Durham Tech Current
Expense and Recurring Capital.This function will complete the fiscal year within the budgeted
authorization levels.
FY 2026 FY 2025 FYs 2026 vs 2025
OTHER FUNDS Original Revised YTDActual* Percenta YTD Actual* Percenta YTD
11-Debt Service Fund $34,758,357 $34,758,357 $513,059 1.48% $813,444 2.37% -$300,385 -0.89%
32-Community Development Fund $6,402,871 $8,771,174 $653,499 7.45% $566,670 7.06% $86,829 0.39%
33-Housing Fund $8,636,500 $8,651,735 $6,890,706 79.65% $5,775,139 75.81% $1,115,567 3.84%
35-Emergency Telephone Fund $419,062 $1,793,470 $249,238 13.90% $298,879 17.02% -$49,641 -3.12%
w 37-Visitor's Bureau Fund $3,321,110 $3,566,697 $1,904,608 53.40% $2,343,383 62.49% -$438,775 -9.09%
44-Inspections Fund $1,685,115 $1,685,115 $1,662,058 98.63% $885,955 50.16% $776,103 48.47%
50-Solid Waste Enterprise Fund $13,695,848 $14,960,367 $10,900,625 72.86% $10,845,526 77.14% $55,099 -4.28%
53-Sportsplex Fund $5,720,578 $5,742,249 $4,508,526 78.51% $4,488,377 85.72% $20,149 -7.21%
70-Employee Health&Dental Fund $19,398,408 $19,398,408 $11,136,724 57.41% $10,341,832 57.31% $794,892 0.10%
11-Debt Service Fund $34,758,357 $34,758,357 $33,418,037 96.14% $33,461,335 97.50% -$43,298 -1.36%
32-Community Development Fund $6,818,575 $9,186,878 $1,309,263 14.25% $1,508,184 16.79% -$198,921 -2.54%
33-Housing Fund $8,636,500 $8,651,735 $6,584,550 76.11% $7,058,999 92.66% -$474,449 -16.55%
35-Emergency Telephone Fund $419,062 $1,793,470 $1,160,374 64.70% $526,358 29.98% $634,016 34.72%
y 37-Visitor's Bureau Fund $3,321,110 $3,566,697 $2,156,809 60.47% $2,221,101 59.23% -$64,292 1.24%
a 44-Inspections Fund $1,685,115 $1,685,115 $1,214,830 72.09% $1,201,656 68.04% $13,174 4.05%
W 50-Solid Waste Enterprise Fund $13,695,848 $14,960,367 $7,871,333 52.61% $7,775,511 55.30% $95,822 -2.69%
53-Sportsplex Fund $5,720,578 $5,742,249 $3,429,609 59.73% $3,285,099 63.00% $144,510 -3.27%
70-Employee Health&Dental Fund $19,398,408 $19,398,408 $14,545,757 74.98% 13 657 602 75.68% $888,155 -0.70%
Other Funds
Sportsplex Fund
Sportsplex Fund Sportsplex revenues are at$4.5 million or 78.5%of budget as compared to$4.4 million or
85.7%the prior fiscal year.The revenue variance is due to the timing of postings to County ledger.
Revenue performance is projected to meet budget with no additional disruption in program revenues
from facility repairs during the first quarter of this fiscal year. Ice Rink revenues are$1.6 million or 30%of
budget,which is similar amount to the prior fiscal year.Wellness and Membership revenues are$1.2
million or 21%of budget compared to$1.3 million the prior fiscal year.The Sportsplex expenses are$3.4
million or 59.7%of budget compared to$3.2 million of 63%the prior fiscal year. Debt service is sufficiently
covered by Sportsplex revenues.
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Solid Waste Fund
Solid Waste Fund Solid Waste revenues are$10.9 million or 72.8%of the budget as compared to$10.8
million or 77.1%of the budget in the prior fiscal year.The solid waste program fee of$138 is billed as a line
item on the Property Tax bill. Peak fee collections occur by the end of December.Solid waste expenditures
are$7.8 million or 65.1%of expenditures as compared to$7.2 million or 54.3%the prior fiscal year.
Consistent with well performing enterprise funds,the fund remains self-supporting this fiscal year.The FY
2025-26 budget includes a fund balance appropriation of$2,351,917 for pay-as-you go capital
requirements.As a result,the unrestricted net position of the fund is projected to decrease.
Visitors Bureau Fund
Visitors Bureau revenues are$1.9 million or 53.4%of the budget as compared to$2.3 million or 62.4%of
the budget.The revenue decrease is attributed to the lower Chapel Hill contribution budgeted at$200,000
this fiscal year of which $100,000 has been received.Visitors Bureau expenditures are$2.1 million or
60.4%as compared to$2.2 million or 59.2%the prior fiscal year.This fund receives Eno Mill annual rental
revenue budget of$74,536 has been impacted by facility closure due to Tropical Storm Chantal with rental
revenue of$2,397 through the first nine months of this fiscal year. Expenses exceed revenues through
March 31.
Functional Leadership Teams by Department
Community Services-Animal Services, NC Cooperative Extension, DEAPR, Economic Development, Orange
County Transportation Services, 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 Services, Housing, Equity, and Inclusion, Library,
Public Health, and Social Services
Support Services-Asset Management Services, Community Relations, Finance&Administrative Services,
Human Resources and Information Technologies
cc:Travis Myren, County Manager
Cait Fenhagen, Deputy Manager
Department Directors