HomeMy WebLinkAboutAgenda - 02-18-2002 - 1 ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 18, 2002
Action Agenda
Item No. 1
SUBJECT: State Budget Shortfall Impacts on Orange County
DEPARTMENT: County ManagerBudget PUBLIC HEARING: (YIN)
ATTACHMENT(5):
215102 Governors Executive Order INFORMATION CONTACT:
NCACC Analysis of County Impacts from John Link or Rod eraser, 245-2300
Governor s Budget Actions Donna Dean, 245-2151
1131102 NCACC Letter to Governor TELEPHONE NUMBERS:
Loch SOCC Letter o Goodman Hillsborough 732-8181
(to be provided under separate cover) Chapel Hill 968AS01
Table-2001-02 County Budget Update Durham 688-7331
(to be pmvitled under separate cove) Mebane 336-227-2031
PURPOSE: To receive and discuss a staff report regarding impacts of the FY 2001-02State
budget shortfall on Orange County's FY 2001-02 budget and on the possible Impacts of
anticipated FY 2002-03 Sate budget problems for Orange Countys next fiscal year
BACKGROUND: As has been well documented in the media during recent months, the State
of North Carolina is facing mounfing budget problems for the current fiscal year Governor
Easley issued an executive order on February 5 outlining directives to State government
officials on measures that would be taken to ensure that the State's FY 2001-02 budget
remains in balance. The estimated fiscal Impact of the Governors action would be savings of
approximately$1.2 billion as a hedge against a projected Safe budget deficit of at least$900
million.
The North Carolina Association 01 County Commissioners(NCACC) Board of Directors had
written to the Governor on January 3Y, 2002, citing adverse Impacts on county finances from
the economic downturn that parallel the covered Impacts being felt by the State, and urging him
not to delay or sequester inventory tax reimbursements to county governments. That
notwithstanding, among the measures specified by the Governor in his February 5 executive
order were the withholding of various revenue sources earmarked in the State budget far
distribution to county and municipal governments, and relied upon by those governments when
they adopted their FY2001-02 budgets. Revenues the Governorplans to withhold include not
only inventory tax reimbursemems, but also beer and wine excise taxes, and property ax
homestead exemption reimbursements. NCACC disseminated an analysis of the Impacts on
each of the State's 100 counties resulting from the Governor'a stated Intention to retain the
revenues noted For Orange County the estimated loss of revenue for FY 2001-02 would be
approximately$712,000. Thk represents the equivalent of about plant tenths of one cent on
the County's 2001-02 General Fund tax rate.
2
Staff will prepare for the Board 5 con sideraGen at this February 18 work session a draft of a
letter(paralleling the points In the January 31 NCACC letter)that the BOCC may wish to send
to the Governor asking him to reconsider his plans to withhold revenues that Orange County Is
relying an for the current fiscal year The letter would likewise petition the Governor to avoid
leafing additional fiscal stress for local governments in FY 2002-03 that would result from
possible State action to again take revenue historically owed and paid to county and municipal
governments soon yeas
The withholding of expected revenue by the State,while unwaranted and damaging,will have
omparatively less impact on Orange County than it will have on many other Ideal governments.
Staff will rivers a PowerPoint presentation at the Febmary 18 walk session that demonstrates
the Impact of announced State revenue withholding from Orange and some of our neighboring
counties for FY 2001-02. This report will also outline some of the other adverse impacts on the
County's current budget resulting from the current economic decline(e.g. reductions in
anticipated sales tax revenue and Investment earnings) along with aspects of the County
budget that may yield expenditure savings or unanticipated revenue for FY 2001-02. The
Manager will also offer his observations about recommendations he may consider malting at a
later date to reduce anticipated expenditures (e.g. possible delay of certain capital expenditures
or transfers)either in the current or next fiscal years.
FINANCIAL IMPACT: The staff presentation will directly address a range of possible financial
impacts on the FY 2001-02 and FY 2002-03 Orange County budgets stemming from anticipated
State budget match and the generally poor state of the economy.
RECOMMENDATION(S): The Manager recommends that the Board receive the reset for
information only at this time
3
...
MICHAEL F EI9LET
GIMMINUIR
EXECL71VE OREM NUMBER NO. 19
CLASSROOM PROTECTION AND ORDERLY BUDGES ADMIMSIBATION
GIVEN STATE OF FISCAL EMERGENCY
WHEREAS,ANcle III, Sec.5C)of Lha Contribution of North Emolw provides that @e
State may am operate A a deficit during the Intel pried covered by a budge[ For Wcsc
purposes, a 'deficit' is defined as having been mound when total expenditures for the Seem
pedod of the budget pared the total oftaeipa during the period,plus the surplus remainng in
Ne State Tmavury,at me beginning of the period. The fis at Ideal for ounmt budget began
July 1,IN I;and, '.
WEEREAS,m insure that the State does not now a deficit Pot the Gaul your covered by
a ddlgA,Article III, Sec 50)of Ad Coresomma volutes me Oovernor m continually survey,the
mllectiou of revenue. If, A a result of hi3 radvoye, he determines that tNal receipts for hm
f xal period, when added to the surplus remaining on the Trcaawy at Nc 6,m m,g of the Escal
pedod, will not be sufficient to pay budge¢tl expenditures, the Governor. after Suit taking
attempts provisions for the prompt payment of the pri cded aM merest on the State's
oun'tandmg bonds and no ,most effect We oecesaary fommies w State "paratroops b keep
medcfcit from occurring,and,
WHEREAS, continually surveying the collection of tee Slate's revenues pumwnt in
Anicle III See_i (3)oftha Cohtdion is a normal fatigue of the oftte of state Budget and
Management(OSBM)end repatls on its surveys me Malted lawinely by the Governor;and,
WHEREAS, OSBM how provided the,Governor with detailed wallop on the grwAng
fiscal paned deficit and,along frith he Office of Nc Governor,has also advised memMrs office
Central Assembly of the situation, including the limaidenf Ikoiemlum of Be Senate and the
Speaker of the Houst of Representatives;and,
WHEREAS,on Ocmb¢31,2001,OSHM,at fee direction of the Governor,noticed state
agency expadithaw fm the remainder of the fiscal year,and,
W}IEREAS,as detailed in a memswdum to the Oovnnor Gam OSBM dined Febrwer
0,2002, OSBM mimates, in light of Ianuery 2002 collections and new cwnomio forecasts, a
growing substantial deficit for hand yew 2001 O2 Nat will not be covered by the reduction in
expendtmemessmes adopted an October 31,2001;and,
WHEREAS, in light of OSBM eatimrtza, Nc budget ancient by the Gmmal Asmmbly
fm fiscal year 2001-02 owed be administered as analog withom Ne State incurring a deficit in
its administration;and,
WHEREAS,it is found as afact that based on Geneal Fwd fnvenue aglamiee through
January 31, 2002, and projections rut these revenues dwough Iwo 30,2002, want receipts foe
the current fiscal year wall am meet the exl i nditmes anticipated mmd budgeted by the 2001
General Assembly:and,
WHEREAS, from this fact it is determined and concluded cast unless debts economies
in Stine expenditures are made,tae State's General Fund expend sate will cowed General Fwd
r s,for the concert fiscal year
5
NOW THER13FOµp by the aubm ty vword in no as Governor by e4ticic ill, See 5b)
Of Ca Constitution ofliforrt Carolina to innrte that adcfidt is not iawtted In the adminlsnation
of the badger for fiscal year 2002,IT IS ORDERED
Section 1, OSBM will wnhnuc b reduce, as necessary, State expendiNtes Imm
Funds appmpiiand to operate State deparnueas vnd iosriluiom,and continue mnnWy allotment
expmtlitmc and review meaaves.
Sedlon2. OSBM will Met, its nn esvey, eapeodltures for pftll cepmvement
pmjxta for which Stara foods have been tactual aled but not placed under Stare contract and,as
accrual Nampo my muwdeaplml lmptovemeal fast to the Correct FuM.
Section 1. OSBM will total as necomary, nonanail Fund and non-Highway
Fwd receipts into the frcnval Fmtl to support appreciation upcaditures in order to avoid a
deficit n the Geneal Fmd.
Section 6, OSBM may borrow, as asbestos,receipts from rantOmeal Fund Stme
t mitts and mrvHighway Fmd Smte nex ipta for support of Gmaal FuM appropriation
cxpendbu es
Section 5. OSBM may uan:fen ss necessary, funds Gam the Highway Trost Fund
Account for support of Ccncy FuM appropriation expenlitwes,
Section 6, Otil my, as necessary, order Ibe delay or Malediction of putative
orders in State General FuM-sopponr4 departments mtl cacti dons,
Section]. Coal may,as reacessary, take cast steps as directed by the Governor to
immc Na a deficit is not incurred for the time[period, including to of certain funds
£hared with lmillitln.
Station ss. no Olrae of me State con¢oher,as aaoited A the State Budget Officer,
is directed to monitor disbursements an presented on requisitions for CASH.
— Sato wn 9. The Office of the Sure Controller,ar advised by the Stale Budget Officer,
is calcium to reactor the local government denominations finds and to emmw such funds in a
specul reserve ae established by OSBM. Retum of all such receipts stall be mada to rho local
goveroment coimbursemem Ponds, if posfiblq after determination that such funds art not
necessarym calmest the deficit.
TFIe Exemtive Order medirt&Executive Ostler No. 3 end be effective Immediately and
shall remain in ethers,w cards,until terminate]or amended at the Governor's direction.
Done to the Capi1W City of Raleigh.Noah C sand arm this 5"day of February,2002.
Micbed F.Pastry
Governor
ATTEST:
Ehitte F.Marshall
Secreuay of State
A anh Carol,no Also...bw of Sunni cii,missionem Euniii 200142 Mi
Culto an CIO ON If Sul
0,yron.of$100 it 1,ri
III an"in 2DO041 County 200041 c...to
Ifloal County Rally will Eizal ft,,,l Mainland Total County 2DO1
Cannot', I,_ anall Santa Tols R,mi....t 01 02 111
Call no On...I" I aly" I I'M WM,014
At...... $1 32�'Sl $202 M 1 $108 Sul $1('01ol $2 2y� S5 870 InD
I ,,"I Ali 607 Sl Day 7aa
Alan...y U2 W� 274 1 S20881 $11AAD SK 860 $669 760
Ami, oral 466 - "I"I Dunn 17U Z90 529 $412n 701
Ali,, $144 974 t2y�OD $180 yon 481,2y) $1 IDS 12S
It,"1 —1 D12 An 1 $75657 $66(Do $1 224 27o
B...Or Sul 1 990 Sir $5b7 944 $147 G10 $a 428,423
�wi $114.503 62 $2-Pa 93n $lmoo I $20ranuir
Carol, Wl.A2 1 $147598 43 125 9y
6...I SAS1,5fF OA2 syl 179948 In 71"46
B"I'lo Sl 111 $473 ON 1 $252 388 1 So C1,954 S)555 Cl 0 709 404
BINK, $751,111 Sol I&D B32 $211 Ina $4.S �509
Si Cut 443 tol 11.337 428 S245.212 Kot 922
cal $744 422 - Mi $829 Ion S8l $4.0fi
IR7,11 $nyl 111211 $Cn� W5 y72 VVEA $282.809
c"", $238 129 V4l $3II)OF Sun 4�2 $ 22,698
(AwIll SIM My sni $42 ISO $i n)7 $60 An $1 Any 407
noll 814 $59 nor 1111 �� Q
On ol Sol 694 Abi Sol 488 So 024�92
C 1 $136 158 22 IDS 159 141
U....1 $116 ISO 39 it
SO
uy all A4Q 9 On? M an
Coll auto 615 $88 SA $�32�07
-,I...b" $G)o 6 17 - An ADS $67a on I
C.... wl 79U C149 36 on S2 SnED 251
Anti $1 Ai Sony a? $.30406 S2 ill 39'r Sul,
C...I'll IM1 11 a 11 M3 Sinni 121
Can $70.&AS 12 029 S146 8BY M3
D....... Sl Ol So $11 S493 If Oyno 5
DO,1, $904316 2 ni $930211 6
Tlp $33a427 5 735 $331 0 1
D,.,. V3,255 III Vf2ul T 2 $AACT�87
$248 623 5 5 1 Do a
$W 488 So 024 fS
Edg'i VIDS 696 SIMKO 6 inn $6l
4-3599 162 750 $4,011 111 non at 1 746 6(af
F..kI S294 an! Sliti 1 274 n5al $121 747 S2 CS So
al a,111.1 in 1 H 775 S1 iuSAO, "M VQ2 OlQ 258 686
If 1, $121 $Irs 587 Sir 1 458
1, US 743 1 $13 629 Ini U7.IS? SIC 168
1 1718W D","I off Of $ut 445 MCCA $1 740,4D5
1�216
1�216
J�j 216
1 216
1 216
noun, a 16 �:J 431 $ 9 533 $227179 $63.033 $1 174 D72
GO Card 0 7 5 o23B 026 1 $4 Sul 360 V48 li $17 303 026
v7,5 is W 854 Alto nua 121568 �4,833 717
$72434 6427 414 $21 a 03, $4.6%23b
Hill 474595 ull If $132 any $n,743 432
SO'4�
HIrl $61 04A'05 1654,751 $101142 !$4.aK54�
H,ISO MISS $nM14 $47,201 $261 My %102 Ri So An 11q
Hill' NIN 1 $�17 272 V235(m $396 717 t92 44)) or M.1 uD
Hyll 1 Satiny 1 V4 44D $14724 M 143 $19 an't $497.5a)
n,i Sony 737 $221 $84 OC7 $1 uIT 6f6 ISMOM of 4ST 615
joi t129, 59 Ul 855 SiCSIC $7D 05B $1,32?275
VD1.185 $5 7m 611
Nod,C'mi I I,ASSOON'tion of c",tvc..."lialm EbMOtad"01�02 Modisaid
0,1y�,,fs if islassaff's Emefieiasar iIjdget AllionS Cosla,iar Co.nis,f Ritatl
Ovorage of Z 100 mil is aal mcd
200041 50%of 2GOOlDIC..fity 2550�01 301
T,Wl Cilia, 511,&Was isa.dy H'ins,i d M�i...d Total islulty Nool
I....for,,, EXOSG TMGS Ro,"bliver, Dirislais 02 M,d,,d
47s2,gn
1211 932 Miss 857
19�014 P4.322 145
12af 571 2.777
V7.765 83445$ �l 12.211[1
111 344 USO 112,735 �WoI2
$��D83 412 $22 @83 7K
I A��N m(alS 111111 P49 944 1 D73333
7aa 2111 1.470789
340As5 al IS.Mu $146 112 $3 K7 iii
U73,055 �164.� 48"70 W8,142 $207.4is 4�4o.b
SNS 475 f277�20111 is 240 G1 oua.ola 58 2aD S7 787XG
Nw ani 993,ols SZ0711.Q03
Ck,s1I I,,,,'27 740 377�isn� $�527 so 1
�11 P12 168 $1 6s 232 Vaal 900
$36487 1�302 W�
$7 I� Uziszs $265r'as
40 034 $202.265
tiz 063 �92,435
p1m, 11".of, I'll"I W 283 ��!a)693
Pitt $W059 $212 W 56(435 $1,D35 498 315 08
2D $93 5Q
100 1084i�
$77 73T B471,243
6999 �l all 512
an'kiisnar, I","I all...
Ili all
$31 505 $11 $1,11,$61
S75 8 7m saals
(34 gas MIM5
6151 3S2 542 241 61 712 851
urw
W.4ai $65 RI2
2111 12 310.5Z4
Irsill 827,69D
ulon M M
val,, �K 887
Volk, $3 431 ti$4 $aio 050
"8slan $1 4r's'f
'Viihm.kal
le
Iva a ol,,11
Vik" "'.723 1 9476 $300 562
WiNn ---
YWdK r a54 070 $249 b1b
a22A84
Total ta4"I'll, 1. S 982 ilis
9
NORTH CAROLINA ASSOCIATION OF
' COUNTY COMMISSIONERS
^ °
waeior,NORTNOOaou M Zory-era TELEPanNE019171122ad wy 91 w3l0W
January 31,2002
'FIteHOnmuble MiGael F.Fadery
Ofdcuefthe Gicemor
20301 Mail9amce Center
Raleigh,Noah Cataluna 21 699 03 01
Dese eovetnor Easley
We ^ndaamrd me su'mus problems facing the suite with regmd m the correct year budget
County budgets are being negatively affected by the same aconondc forces. Therefore,we urge
you net W delay or cour to the payment of S95 Trump in inventory tax dentbwe n to
sclvdnled far Apt1130,2102
The current aunomie amwd^wn not ody has csmd a decline To wwty cal,,and property tax
collection,, bat also increased the neat for county semces to mumployed and emnomically
disadvantaged cafzms. Court Ile me blue. also face escalating hlediwfd con foreasts.
Wien the prystod shoe fall in dm stairs Medicaid estimated, eouury Medicaid pawning may
033%or S95 trillion over last yeses pmjutums. Ourpoorm end mode coal catards first it
incereamingly difficult to pay 0r Their residents od adicwd yevirew from Cowry,with 32%of
,is population McAui-,Iupbk, must mc 30F of its p cceary tax rate to per fm the tit➢s
arm,of Medicaid Few atrsoums ire led:wcsm fund school,public safety,and emu critical
wunry°ervice;cavmgthe romry at amjor exorcism wlopmmblisadvmlage
'far wwties. lice the suite, have mken action be respond to the fiscal crisis. Sixty counties
raised propenygm mew in this budget year.with rata Increases avenging mom thw Sp per$160
-
Scotland County,with over 30%of its population eligible GrMWicaid,raised its rate by 176 to
Seto. Mecklenburg County"steed'is property go rate by nearly 11¢. between County,with
33% of Its populaion stubble for Medicaid, added IN to us tire. Now over 310 of R06°sou
County's tax rare,represwtiuu lV%of is budget,is used Our Methcaid clone. Counties reported
layfog o6nafG deftnfng argued a yen&teres,and emulog caress the heard budget em;in order
_
to balmw their battered this ycur lose of the pmmlvmd inventory Her r°®bamamaara further
jcopandiza our because,faced hallu
In askifiary wwdm arc already considering drastic wooer to contain ,pmm ... vdfor The
net years budget. For namplS Mmklmbwg Cocty is amrm all oflm departments,f Jodvrg
its prop,mhotsystem to cut 10%a0m their currcm sibecavens.
I
Tha HOnocAle lvGChael F.Earley -2- Ienuazy 31,2002
Counties one Wlemp ring to message Nair own budget crisis. Plexae do no,add w the doctor by
falmg to sake paymmh to counties of the achedYledivvmmrytm:mimbmsem®ty
Very ttWy yours,
C.Ronald Aycock David R.Plyler DR n4Davis
Execative olxomr President Fr at Vice Preaidmn
Noahwoeds Michael Thompson Delilah Sisals
5¢onn Vine President Th1rd Vice President Past President
CRA:kad
cc The Hermon relam Basnlght,Prsdent MO TCmpore,NC Source
41c Hwerable fames B.Black,Speaker of the House,NC Force ofAeprasettativas
Franklin Frcwmq it,Sco m Assistant for Governmental Affma,Office of the Governor
end LichNa.Ditxrol of lntergovcnnnemal Relations,Office of die Governor
David T.McCoy,Stele Burger OtRCer
unfair Morin,Smor Advisor for Poercv&Communication,O%oeofthe Governor
6oM Carolina County Commissioners Chorus _
TortM1 Caotna Covey managers
AIM KaM Cazolcoa logilletma