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HomeMy WebLinkAboutAgenda 05-28-2026; 2 - FY 2026-27 Manager’s Recommended Budget Presentation 1 t ORANGE COUNTY NORTH CAROLINA Manager's Recommended FY2026-27 Operating Budget May 12 & 28, 2026 ��gs 2 FY2026-27 Operating Budget Introduction FY2026-27 Operating Budget Priorities 1. Minimize Tax Rate Increase 4. Maximize Efficiencies in County Operations and Underscore Cost Recovery while Preserving Core Services 2. Prioritize Public Safety and Social Safety Net Direct Services 5. Modestly Invest in the Employee Compensation s. Support School Current Expense and Pay-Go Package Funding Amid Declining Enrollment 6. Align any New Budget Investments with Strategic Plan Goals ORANGE COUNTY 2 N©RTH CAROLINA 3 FY 2026-27 Operating Budget Introduction • Total Recommended Budget at a Glance - Total General Fund Revenue - $325,130,721 • $275,868,111 Generated by Taxes — Property Tax, Sales Tax and Licenses — 85% • $49,262,610 Generated by County Operations — Grants, Fees, Donations, Fund Balance, Interest, etc. — 15% - Total Operating Budget (General Fund) - $325,130,721 • Total K-12 Education (Operating + Debt Service) $148,379,362 or 54% of County Tax Revenue • Net County (Operating + Debt Service — Dept Revenue) $127,488,749 or 46% of County Tax Revenue ORANGE COUNTY 3 N©RTH CAROLINA 4 FY 2026-27 Operating Budget Introduction • General Fund Revenue - Property Tax Natural Growth — 2.27% Increase = $4.7 million Sales Tax — 2.7% over FY2025-26 Budget or $1 .2 million • Reduction in Hold Harmless payment— ($300,000) Department Charges for Services • Emergency Medical Services @ 200% of CMS rate - $600,000 • Medicaid Maximization Revenue - $1.1 million • Planning and Inspections - $267,100 • Sheriff's Office revenue reductions — ($600,000) • Food and Nutrition Services Administrative Costs — ($680,000) ORANGE COUNTY 4 N©RTM CAROLINA 5 FY 2026-27 Operating Budget Introduction • Debt Service and Pay-Go — Debt Service increase of $7.8 million • Exceeds all General Fund Revenue Growth ($5.9 million) — Pay-Go for Schools increase of $3.0 million — Pay-Go Reduction for County Projects ($350,000) • Prior year balances used for IT Infrastructure and Parks Maintenance Fund ORANGE COUNTY 5 N©RTH CAROLINA 6 Provide Continuation Funding to Schools • General Fund Expenses - K-12 Education • Current expense increase 2.5% = $114,114,132 • Per Pupil funding will increase by $294 over FY2025-26 for a total of $6,171 per student — CHCCS District Tax adds $2,807 in per student funding = $8,978 for CHCCS per student • Due to declining student enrollment, 2.5% increase equates to a 5% increase in per-pupil funding Percent Increase to Total Funding Per-Pupil Funding Current Expense lincrease Base Amount $111,328,011 2.4% 1% $112,441,291 3.5% 1.5% $112,997,931 4.0% 2% $113,554,571 4.5% 2.5% $ 114,114,132 5.0% 3% $114,667,851 5.5% • Nurse and Student Resource Officer Contracts increase 3% = $123,744 to $4,248,550 • Pay-Go increase as recommended in Capital Investment Plan - $3.0 million ORANGE COUNTY 6 N©RTH CAROLINA 7 Provide Continuation Funding for Schools Total Budgeted Students by District 13,000 12,115 12,242 12,339 12,239 12,387 12,274 12,236 12,351 11,993 12,160 11 726 11,820 12,000 1,442 11,382 11,253 11,141 11,018 11,000 10,741 10,000 9,000 t CHCCS 7,966 8,072 8,011 8,134 8,156 8,110 8,023 8,003 fOCS 8,000 7,863 7,801 7,936 7,925 7,751 71357 71437 7,148 7,227 7,172 7,000 6,000 5,000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 CHCCS Budgeted Student Decrease of 277 Students Budgeted student percentage decreases from 58.16% to 58.08% f OCS Budgeted Student Decrease of 174 Students ORANGE COUNTY 7 Budgeted student percentage increases from 41.84% to 41.92% N®RTH CAROLINA 8 Provide Continuation Funding to Schools County Per Pupil Funding Amount History $294 increase from FY2025-26 $7,000 $6,171 $6,000 $5,877 _ $5,346 $5,000 - $4,165 $4,352 $4,367 $4,367 $3,868 $3,991 $4,000 $3,571 $3,698. $2,957 $3,069 $3,200 $3,096 $3,102 $3,167 $3,269 $3,000 $2,000 $1,000 - o� oo do titi titi ti3 ti� ti� ti° ti� tiro tie ,�o titi titi ti3 �, ti� ti� ti� o�' ow o`�' ti° by titi y�, ti°` y�, ti� y^, ti� y�, ti°• by titi 3� ti°` ti� ti� ORANGE COUNTY 8 N©RTH CAROLINA 9 Provide Continuation Increase to Schools — Chapel Hill-Carrboro City Schools • Recommended Current Expense increase of $1 ,529,525 over FY2025-26 • Assumed teacher salary increase from the State — 3% in FY 2026, 4% in FY 2027 • Continuation request = 7.5% increase in per pupil funding Chapel Hill-Carrboro City Schools Continuation Request FY2026-27 Manager Continuation Request Difference Recommended $66,282,711 $67,838,023 ($1,555,312) FY2026-27 Manager Expansion Request Difference Recommended $66,282,711 $71,538,023 ($5,255,312) ORANGE COUNTY 9 N©RTH CAROLINA 10 Provide Continuation Increase to Schools — Orange County Schools • Recommended Current Expense increase of $1 ,256,196 • Assumed teacher salary increase from the State — 3% in FY 2026, 4% in FY 2027 • Continuation request = 6.6% increase in per pupil funding • . �_ • - . _ � . • . CC . - • FY2026-27 Manager Recommended Continuation Request Difference $47,831,421 $48,544,086 ($712,665) 111110 M� _ FY2026-27 Manager Recommended Expansion Request Difference $47,831,421 $50,484,041 ($2,652,620) ORANGE COUNTY 10 N©RTH CAROLINA 11 FY 2026-27 Operating Budget Introduction • General Fund Expenses — County Department Summary • 20 of 27 General Fund Department Budgets — Recommended below base budget — Operating cost and personnel reductions — New revenue • Total decrease in 20 General Fund Departments = $3.8 million • Net decrease in all General Fund Departments = $1 .3 million ORANGE COUNTY 11 N©RTH CAROLINA 12 FY 2026-27 Operating Budget Introduction • General Fund Expenses County Department Changes to Base Budget $1,000,000 $500,000 5 5 5 5 0 5 0 5 5 5 5 5 5 5 0 5 5 GQ' GQ' o� G� ��� 0� �O ��li �Q' CLQ' Q.G PQ �� GQ' JG G�li �� �� G�li G�� \G� o� \G� ,<�O \G� S JV �\ -v G �\ �`� Q- � P J 1 G J\ 5 S 10 �` Q- O J �\ F J J 5e 5e- �<G 5Q� G�\ ��,P-}�� ��0���0'e�gd O O�Pge�\J!G e- P<� P<S BOJ & �Q- �G F< 5 -<5 �� -<5 F< Q/ <,Z) '�� O� ��P �`\ '�� Q,� �� G� AQP��� O�Q O�t,Q Q�' G��Q�0\�SQ �OQ�QQ G\P ���\���� $(500,000) 00 QO 5P "' ,�J J� C)o J� G ��' �� �5 �. \\ C� P� �<' Q-Q' P Q- JQ J P O -1 GO Jam' Q� Q-C� �� Q , O Cb Q�oP o5 Q�G�o��\ Q�� o �' G 00 OJ \�P G GAJ (:P0 G ell �P�G� \SFO $(1,000,000) F� � x,500,000) 12 N©RTH CAROLINA 13 FY 2026-27 Operating Budget Introduction • General Fund Expenses — County Personnel Costs • 2% Wage Increase - $1.86 million • 9% Health Insurance Increase - $1.3 million • 5% Local Government Retirement System Increase - $570,000 • Tax Administration Reserve for Tax Assessment Recommendations - $250,000 • Living Wage - $500,000 - Increases from $18.18 to $20.02 per hour - Impacts Departments with significant use of Temporary Employees: Solid Waste, Library, DEAPR • Sheriff's Office Overtime - $370,000 based on multiyear trend ORANGE COUNTY 13 N©RTH CAROLINA 14 FY 2026-27 Operating Budget Introduction • General Fund Expenses — County Personnel Cost Reductions • Temporary Suspension of Salary Step Program — ($400,000) • Position Reduction Summary — 10.25 FTE in General Fund General Fund Savings - $1,140,000 — Library Temporary Staff Funding Reductions - $122,121 — 5 positions in Sheriff's Office will be unbudgeted and held vacant for FY2026-27 - $440,600 savings — 3.675 FTE Reduction in Other Funds Other Fund Savings - $250,000 — County Costs to Continue • Bonds, Insurance, and Workers Compensation - $280,000 • Software as a Service - $368,000 • Fuel Costs - $595,400 • Longtime Homeowners Assistance - $42,500 • Telephone Efficiencies — ($400,000) ORANGE COUNTY 14 N©RTH CAROLINA 15 FY 2026-27 Operating Budget Introduction • General Fund Expenses — Maintain Outside Agency Funding • $693,953 allocated to agencies through scorecard • $107,500 contract with Habitat for Humanity transferred to Housing Department — Reduce Payments to Chapel Hill and Mebane Libraries • Two-year phase out of payment to Town of Chapel Hill - $310,662 in FY2026-27 • Elimination of payment to City of Mebane - $700 — Increase Social Justice Fund • $50,000 increase to $200,000 — Reduce Salary Savings due to Vacancy Eliminations • $163,969 reduction to $4.9 million ORANGE COUNTY 15 N©RTH CAROLINA 16 FY 2026-27 Operating Budget Introduction • Property Tax Rate - Residual/Net General Fund Revenue Needed - $1216501 000 - Recommended Tax Rate Increase — 3.75 cents per $100 of assessed Value - Total Tax Rate - increases from 63.83 cents per $100 of value to 67.58 cents ORANGE COUNTY 16 N©RTH CAROLINA 17 Manager's Recommended Tax Rate • Manager's Budget Recommends Increase of 3.75 cents over FY 2025-26 ➢ Impact on Home @ $400,000 = $150.00 ➢ Impact on Home @ $500,000 = $187.50 County Tax Rate Hisory 120 99.80 100 95.00- 90.30 .80 87.80 87.80 88.00 87 84.30 85.80 85.80 85.80 85.80 85.80 83.77 85.04 86.79 86.79 86.34 81.87 83.12 83.58 80 — 67.58 63.83 60 - 40 - 20 - 0 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Rec 18 FY 2026-27 Operating Budget Introduction - Visitors Bureau Fund • Visitors Bureau operating expense reduction — ($324,692) • Arts Commission net increase — $44,641 — Solid Waste Fund • Solid Waste Program Fee increase from $138 to $142 per parcel - $280,000 • Department to review additional options for long term sustainability — Fire Districts • Damascus Fire 1 .30 cents • Eno Fire 2.00 cents • Little River Fire 1 .00 cents • South Triangle Fire 1 .30 cents ORANGE COUNTY 18 N©RTH CAROLINA 19 Budget Consideration Schedule -I Ml W#I z I - - - . May 12 Budget Public Hearing —Whitted Building; Hillsborough Work Session May 14 Education Budget Information Session — Hillsborough • Outside Agencies May 20 Budget Information Session —Virtual Work Session May 21 Fire Districts Budget Information Session — Chapel Hill Public Safety • Human Services Work Session May 26 Support Services • General Government • Community Services May 28 Budget Public Hearing — Southern Human Services; Chapel Hill June 4 Work Session • Resolution of Intent to Adopt June 16 Business Meeting • Adoption of FY2026-27 Operating Budget and Capital Budget ORANGE COUNTY 19 N©RTH CAROLINA 20 Questions? ORANGE COUNTY N©RTH CAROLINA