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Home My WebLink AboutAgenda - 09-09-2008- 3ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 9, 2008 Action Agenda Item No. 3 SUBJECT: Development of 2009-19 Capital Investment Plan (CIP) and FY 2009-10 Annual Operating Budget DEPARTMENT: County Manager and Budget PUBLIC HEARING: (YIN) No ATTACHMENT(S): Attachment 1. FY 2009-19 Capital Investment Plan (CIP) and 2009-10 Annual Operating Budget Preliminary Timelines Attachment 2. FY 2009-10 Preliminary General Fund Budget Outlook INFORMATION CONTACT: Laura Blackmon, (919) 245-2300 Donna Coffey, (919) 245-2151 PURPOSE: To provide the Board an opportunity to comment on the past and upcoming CIP and annual budget processes and discuss emerging fiscal challenges and budget drivers that the County will face in the future. BACKGROUND: BOCC Comment on Past CIP and Annual Operating Budget Processes and Provide Direction for Upcoming Processes During the June 2008 budget work sessions, Commissioners indicated they would like to discuss the budget development process. Tonight's work session offers an opportunity for the Board and Manager to discuss the FY 2008-18 CIP and FY 2008-09 budget processes to assess what went well and exchange ideas about how to improve development and presentation of future CIPs and budgets. Preliminary Timelines for Development of CIP and Annual Operating Budget Attachment 1 of this agenda abstract provides preliminary timelines for development of the upcoming CIP and annual budget. Again this year, the timeline proposes the CIP be developed and adopted this fall leaving the winter and spring months for development of the County's annual operating budget. The proposed timeline anticipates adoption of the annual operating budget in early June 2009 in order to allow departments and Boards of Education sufficient time to implement the County Commissioners' adopted budget by July 1, 2009. 2 Preliminary FY 2009-10 General Fund Budget Outlook While it is early in the fiscal year, it is not too early to begin sharing fiscal needs that will potentially affect the County's upcoming FY 2009-10 annual operating budget. Attachment 2 of this agenda abstract is intended to give the Board a preliminary outlook of budget drivers likely to influence the FY 2009-10 budget. Highlights of the preliminary outlook include: • Projections for property taxes assume 3% natural growth in real property. • Orange County is nearing the completion of its property revaluation process. Revaluation is a systematic, in-depth process of reappraising all the real property in the county to the current market value and is necessary in order to maintain equitable and uniform property values among property owners throughout the county. North Carolina General Statutes require counties to revalue real property at least every eight years. The Orange County Board of Commissioners has chosen to authorize revaluations every four years. The next revaluation of real property will become effective on January 1, 2009. A direct result of revaluation is that the County's tax rate will be adjusted to be "revenue neutral". Revenue neutral is defined as the rate estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the current tax rate if no reappraisal had occurred. Orange County's current tax rate is 99.8 cents per $100 of valuation, and it is much too. early in the budget planning process to anticipate what the revenue neutral rate will be. • Fiscal year 2009-10 sees the final year of the three-year phase in of Medicaid Relief/Sales Tax Swap legislation approved by the General Assembly in August 2007. The financial impact on Orange County includes a reduction of about $4.9 million in sales tax revenues with an offsetting expenditure reduction in Medicaid expenditures. • Over the last two-to-three years, the County has embarked on a number of major capital construction projects and long-term leases including schools, parks, libraries and other County and partner facilities. Given the County's limited pay- as-you-go capital funding, it has been necessary to debt finance these projects. It will be necessary, in the upcoming fiscal year, to begin repaying the borrowed monies as well as begin funding day-to-day operating costs such as utilities and leases. The projected increase in debt service and annual operating costs associated with new facilities totals $5.25 million. • During fiscal year 2006-07, Commissioners approved an employee pay and classification study. As the Board will hear later tonight, the consultant is nearing the completion of the study. Last spring, the consultant indicated a good benchmark for study implementation cost projections would be 10 percent of total salaries. • The number of students attending school in the County's two school districts has increased, on average, 385 students each year. The anticipated FY 2009-10 fiscal impact of 385 students at the current per pupil allocation of $3,200 totals $1,232,000. It is too early to predict the tax rate impact of the preliminary budget drivers. However, it is safe to say that the combination of anticipated revenue reductions and expenditure increases will have an upward impact on the revenue neutral tax rate. Staff plans to offer additional detail regarding the FY 2009-10 budget outlook during tonight's meeting FINANCIAL IMPACT: During this work session, staff plans to share very preliminary fiscal information for the upcoming fiscal year (as outlined in Attachment 2). RECOMMENDATION(S): The Manager recommends that the Board comment on the past and upcoming CIP and annual budget processes and discuss emerging fiscal challenges and budget drivers that the County will face in the future. ~-'1~ZtC,hm~.n--~- 09/09/2008 FY 2009-19 Capital Investment Plan (CIP) and 2009-10 Annual Operating Budget Preliminary Timelines The chart below offers a preliminary timetable for Orange County's FY 2009-79 CIP process for Commissioners to review and discuss at the September 9, 2008 work session. It may be necessary to update the timeline, after the work session, to reflect direction provided by the Board. FY 2009-19 Capital Investment Plan (CIP) Preliminary Timetable Coun CIP Schools CIP Kick-off August 13, 2008 September 3, 2008 Requests due to Budget Office September 5, 2008 County CIP requests reviewed by CIP Review Team, County Manager and Week of September 15, department heads 2008 _ Finalize .CIP recommendations and September 22 through share with department heads October 10, 2008 Presentation to BOCC at work session October 28, 2008 October 28, 2008 Prelimina Public Hearing November 6, 2008 Follow up from previous BOCC work November 13, 2008 session Adoption November 18 or December 1, 2008 Page 1 of 2 09/09/2008 FY 2009-10 Annual Operating Budget Preliminary Timetable The chart below offers a preliminary timetable for Orange County's FY 2009-70 Annual Operating Budget process for Commissioners to review and discuss at the September 9, 2008 work session. It may be necessary to update the timeline, after the work session, to reflect direction provided by the Board. Once the Board approves its 2009 meeting calendar, staff will update the timelines to reflect specific dates for work sessions as necessary. County Annual Schools Annual O eratin Bud et Operatin Bud et Departmental Inventory Of Activities and Services Due To September 12, ~~ v ~ ~~ a Budget Office (Not Including Cost Element) 2008 ,~~y~a~ r ~MY 4"` ~ t ' # , ~ . ~.,~ ~ ~ ~~ ~ ~ - s .2 f Y _ ~....: ,. Management And Department Heads Collaborate And September Through 1 , ~ ;' ;. Analyze Activities And Services Inventories December 2008 , }~~~K$ ~~~, ; w ~ _~-~ ~ ~ ~~ (c : - ~ ~ Annual Operating Budget Kick-Off November 2008 y ' ~ ~ s ~ ~ ~~~ ~ , ~ ~:. <~- r ;~,. ~.~y Finalize Activities And Services Document To Share With Early To Mid '~~ >w ~' „~ ''j~ BOCC at Late January Work Session January 2009 "r ~~ = ~ rE 1= County Revenue Estimates And Projections Due To ~ ~~~,~ ; t ~ ~ ~_~ January 9, 2009 '~ u ~ Budget Office t s r ra ,. N `~ ~ ~ FU ~ ~ ~_ d i: " ~ ~~ Coun Ex enditure Re uests Due To Bud et Office tY P 4 9 Janua 23 2009 rY ~~ ` ~ `{'~~r' ~ ~` ~~~' ~ ~ , , . ~~;~.~ , - ~~ County Department Work Session To Discuss Preliminary ~~ 5 , ~~.~ FY 2009-10 Budget Projections And Share Departments Late January 2009 . ~~,~ Activities And Services Document With BOCC ~ '_: { Budget Work Sessions For BOCC And Departments To February and March '~ „~'. ~5 ~ = i Discuss Activities/ServiceslPrograms 2009 _ Y t r . ,~~ ~~RS ~~~ ` ~ `~~~ ~~` 1~ ~. "~ 3 :~,~, n _i r J, Budget Work Session (In Conjunction With Annual Joint ` { ~ i1r _ Spring Meeting) For BOCC And Boards Of Education To _ ~ " Itr;, 4~ '` ` = ~• April 2009 Discuss Schools' Budget Request Y 4 s 7~`w~ ~~~y; } „ t ~ U F1~t :~:. i.. _ ~ Y Manager Shares Preliminary County Department April 2009 Recommendations with BOCC Manager Presents Recommended Budget To BOCC Early to Mid May 2009 Annual Operating Budget Public Hearings Mi to Late ay 2009 Annual Operating Budget Work Sessions Late MaylEarly June 2009 Annual Operating Budget Adoption Early June 2009 Page 2 of 2 .+~hrln~etrl~' Z osiosi2oos FY 2009-10 Preliminary General Fund Budget Outlook The list below is intended to give the Board a preliminary outlook of budget drivers that will potentially affect the County's fiscal year 2009-10 budget. Given the fact that if is very early in the budget planning process, the list is not intended to be all inclusive of this point. Staff plans to update the Board on a regular basis between now and the time that the Manager's fiscal year 2009-1 D budget is presented to the Board in May 2009. e r n ~, FY 2008-09 FY 2009-10 General Fund Revenue Assumptions, By Revenue Category gud et $ Change pro'ection Prope Taxes r=., ' ,.,~ -~, Assum lions: ,., ;~` ~ ~ " - ..~--'~..,---~.'~ ~ { ,, . No tax rate increase over revenue neutral rate . y =} t $0 f 3% natural rowth in real roe ~;!; _ $3,849,111 _ __, .,~,_ Total Property Taxes $128,303,689 $3,849,111 5132,152,799 Sales Taxes ~~_- ~`` Assum tons: ~ ` Decreases based on full implementation of Medicaid Relief/Sales t ~ 4Y ~ (gq gg2 224) ~ Tax Swa ~~ _ , ~' , , ; ~ . i No increase assumed in consumers endin ~' ° ~ $0 , . --~ ~~` ~ ' Total Sales Taxes $18,857,31q ($4,892,224) $13,965,086 Intergovernmental ~ ~ ~,"~ ,` ~~ r' ' ~ ` ' ~~ t Assum lions: ~ ~~ ~ ~~ ' C ~~ ~ ;~ ' I No than es assumed , ~ ; r.,~4~. ,~=,~~ $0 r ~ ` - Total Intergovernmental $18,303,163 $0 $18,303,163 i Licenses & Permits ` ~`'~ ~ ~` •_ ~ '~Y f li r ~ ~ '' ~ ~ ~ '` k'~ 1~ a ' N ~ ~~ ' Assum lions: ~ 4 .~ ~ * r-zr` ~ t Y S . '_~ ~ '~ 7 e ' ~ •.~. ~ ~~ s 3 No than es assumed ~~' ~ ~~~'` $p ~Y~~ ~,~ ~ ~~~~~ ) Total Licenses & Permits $288,000 $0 5288,000 Charges for Services `~~ `:~ ~'~. ~~> ~ ~~,' ~ ~ '' ~<~, Assum bons: ~ ~ ~ ~ ~ _ ~ '' ' `~ ~,~ • i ~ Loss of Chapel Hill Carrboro City Schools School Construction ~ ~ ~,. ` ~ j'y; ~~ kc -°~ , . ,~ , 9 ~ ~ ,, '~ s ~~,,, Impact Fees related to decline in new housing starts experienced in e .~{3~ ~ a ? ($660 000) "~ '~' ~~:~~- ~. ~ Chapel Hill and Carrboro (Per County Capital Funding Policy, these t ~~k ~ t',,: , ~ _ a `~a ~" revenues offset costs of school related debt service.) i~ ~~~.~ ~ ~ ~- ` f ~z }'~ = 3 Total Char es for Services $10 859 803 $660 000 510 199 803 4 Investment Earnings '~ ~ + ~b~ ' 4 ~ ~ ~, ~ • ~ ~= 5 Assum lions: ~r ~ ~-r t . °~" > , ~ _:~ r ~.~ z ; 5 No Chan es assumed r. t • ;~. ~~~ $0 ''~- 7 Total Licenses & Permits 5840 000 $0 5840 000 B Miscellaneous ~+ ~~; Y ?.~ ~' ~ ~' ~ ~ r ~~~vN ~ ~. ~~ _ 9 Assum lions: ~ ~ ~ ~ .~`~~'°T~ ~ ..t r,h z ~ ,~ . ~~ ~~ y 0 No than es assumed ~ s ~~ $~ ` ` ~~ '"° 1 Total Miscellaneous 5900 070 50 5900 070 2 Transfers to Other Funds `~ ~ fi`~; ~ ~~ ~ '~` `~ . ~ ~~ : ~ 4 L~ 3 Assum lions: ~= ` 4 No than es assumed k~- j..~ ~; . ~~" ~ ~ "''~ $0 s ;~' { ~.'~:: $D: 5 Total Transfers to Other Funds 52 653,545 $0 52 653 545 6 Appro riated Fund Balance } ~~ ~ ~ ` a ~ '}' & ~'"~~ ~ ~~, , .~ '} ti ;~ ; ~ ~ Y i ~ ~ ~ } u ons: 7 Assum l ._ ~ ~ ~ No appropriation in FY 2009-10; FY 2008-09 appropriation mainly ~ ~ i `x`. , ~ h ' ~ 8 used to offset cost of recurring capital items, including vehicle and ~ ~~~~~ : ($2.000,000) ~ ~~ ~-^~ ~; ~ e ui ment urchases, for Coun de artments r ~' ~ ~~ '~ '`> ` '~ ' ,g Total A ro riated Fund Balance $2 000 000 $2 000,000 50 o Total Projected General Fund Revenues for FY 2009-10 $183,005,580 ($3,703,113) $179,302,466 1i 1 1 1 1 1 1 1 1 1 2 2 2 2 L Page 1 of 2 09/092008 FY 2009-10 Preliminary General Fund Budget Outlook The list below is intended to give the Board a preliminary outlook of budget drivers that will potentially affect the County's fiscal year 2009-10 budget. Given the fact that if is very early in the budget planning process, the list is not intended to be all inclusive at this point. Staff plans to update the Board on a regular basis between now and the time that the Manager's fiscal year 2009-10 budget is presented fo the Board in May 2009. Page 2 of 2