FY 2014 OPERATING BUDGET KICKOFF › budget › past › fy14 › Documents › FY14 Budget...• FY 2014 Process • The Budget Picture – Final FY 2012 year-end numbers – Fiscal

FY14 Budget Kick-off 1

FY 2014 OPERATING BUDGET KICKOFF

Budget and Management Services

December 12, 2012

1


Presentation Overview

• Introduction of Budget Staff • FY 2014 Process • The Budget Picture

– Final FY 2012 year-end numbers – Fiscal and economic history and trends – Updated FY 2013 forecast – Property and Sales

Taxes – FY 2014 Target Base


Budget Staff Chad Balke Andrea Cain Meagan Honnold Nicole Kreiser

Rebecca Linthicum Mark Matthews David McNulty Michelle Venditto


FY 2014 Process at a Glance

Reduction Options NOT

Required


SO WHY ARE REDUCTION OPTIONS NOT REQUIRED?

Let’s take a look at some numbers…….


General Fund – 2012 Summary Operating Results

Original FinalBudget Budget Actual Variance

Revenues and Transfers In 951,996,756$ 952,961,725$ 967,239,936$ 14,278,211$

Expenditures and transfers out (952,100,000) (957,967,453) (950,993,551) (6,973,902)

Fund Balance Appropriated (103,244) (5,005,728) ** -

Revenues and transfers in over expenditures and transfers out 16,246,385

Fund balance at the beginnning of the year 159,451,859

Fund balance at the end of the year 175,698,244

** Budgeted use of fund balance represents encumbrances carried forward from FY 2011.


General Fund Revenues Variance withFinal Budget -

FavorableOriginal Final Actual (Unfavorable)

Taxes: Property 638,646,000$ 638,646,000$ 645,725,047$ 7,079,047$ Sales 111,580,804 111,868,186 120,834,877 8,966,691 Other 8,530,421 8,530,421 9,880,290 1,349,869 Total taxes 758,757,225 759,044,607 776,440,214 17,395,607 Shared Revenues (federal/state/local) 120,840,010 123,082,348 119,334,660 (3,747,688) Charges for services 66,634,169 65,118,800 65,471,200 352,400 Licenses and Permits 3,048,564 3,048,564 3,413,382 364,818 Other 467,788 467,788 400,410 (67,378) Transfers in 2,249,000 2,199,618 2,180,070 (19,548)

Subtotal before Appropriated Fund Balance 951,996,756 952,961,725 967,239,936 14,278,211

Appropriated Fund Balance 103,244 5,005,728 - (5,005,728)

Total Revenues 952,100,000$ 957,967,453$ 967,239,936$ 9,272,483$

Budgeted Amounts


General Fund Revenue Variances • Actual revenues in the General Fund exceeded budgeted amounts by

$14.3 million for fiscal year 2012. Variances in tax revenues and intergovernmental revenues comprised the majority of this difference.

• Total taxes were greater than the final budgeted amount by $17.4

million. Tax revenue increases all resulted from improved economic conditions. The increases in tax revenues were partially offset by reduced intergovernmental revenues of $3.7 million. Property taxes increased by $10.4 million over the prior fiscal year.

$7.0 million over amount budgeted for FY 2012. Sales taxes had year over year increase of $6.8 million and were $9

million over budget. Real estate property transfer taxes, included in Other taxes,

increased $1.5 million over the prior year and were $1.35 million more than the budgeted amounts.


General Fund Expenditures

Variance withBudget vs.

Actual + Encumbrances

FavorableOriginal Final Actual Encumbrances (Unfavorable)

General administration 42,631,726$ 46,753,902$ 44,734,430$ 636,800$ 1,382,672$

Human services 214,143,720 213,405,177 211,029,938 59,360 2,315,879

Education 330,402,642 330,402,642 330,402,642 - -

Community development and cultural 25,709,071 25,794,841 25,224,320 152,137 418,384

Environmental services 7,849,575 7,960,633 7,643,371 14,516 302,746

General services administration 21,496,357 21,561,631 21,081,514 154,765 325,352

Public safety 100,861,909 102,260,311 101,049,020 105,441 1,105,850

Transfers out 209,005,000 209,828,316 209,828,316 -

Total Expenditures 952,100,000$ 957,967,453$ 950,993,551$ 1,123,019$ 5,850,883$

Budgeted Amounts


General Fund Expenditure Variances • Overall Hiring freeze continued in FY 2013 and accounted

for approximately $1.5 million in additional savings • Human Services: $2.3 million due to under spending in

energy assistance, TANF and CPS client assistance and LME Medicaid payments that were offset by less revenues being drawn down from the state as these are reimbursement based expenditures

• General Administration: – $1 million associated with increase in Revaluation Reserve fund

balance – $250,000 associated with lower health insurance payments

• Public Safety – $750,000 variance due to a slower hiring schedule for the Hammond Road opening than anticipated


General Fund: Fund Balance Summary

2012 2011Increase

(Decrease)Non-spendable: Inventories/noncurrent receivables 680,079$ 753,870$ (73,791)$ Restricted:Stabilization by State statute 61,577,460 53,231,845 8,345,615 Register of deeds automation 310,538 455,638 (145,100) Committed: - Revaluation reserve 3,468,905 2,628,106 840,799 Working capital 109,629,660 102,279,156 7,350,504 Assigned: Planned expenditures 31,602 103,244 (71,642)

175,698,244 159,451,859 16,246,385

938,520,000 952,100,000 (13,580,000)

18.72% 16.75% 1.97%

Working Capital per financial statements 109,629,660$ 102,279,156$ 7,350,504$

Working Capital as a Percent of Next Year's Budget 11.68% 10.74% 0.94%

General Fund Balance

Subsequent Year's Adopted Budget

Fund Balance as a Percent of Next Year's Budget


FISCAL AND ECONOMIC HISTORY AND TRENDS


Budget Changes Since FY 2009

$984.4

$971.2

$953.6

$947.1 $951.2 $952.1

$938.5

FY 2009Adopted: July

2008

FY 2009Amended: Feb.

2009


2009

FY 2010Amended:April 2010


2010


2011


2012

FY 2014 Target:December

2012

(in millions)


Unemployment Statistics

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 October2012

Wake 4.0% 5.6% 5.3% 4.4% 4.1% 3.6% 3.5% 4.6% 8.4% 8.7% 8.3% 6.8%North Carolina 5.6% 6.6% 6.5% 5.5% 5.3% 4.8% 4.7% 6.2% 10.8% 10.6% 10.5% 8.0%US 4.7% 5.8% 6.0% 5.5% 5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 9.0% 7.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%


Year-to-Year % Change in Revenue

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

FY05 to FY06 FY06 to FY07 FY07 to FY08 FY08 to FY09 FY09 to FY10 FY10 to FY11 FY11 to FY12

Perc

ent C

hang

e Ye

ar to

Yea

rWake County General Fund Revenue

ALL GF REVENUES PROPERTY TAXES SALES TAXES

Economic Growth Recession Recent Trends


Property Value (in millions) FY 2010 FY 2011 FY 2012 FY13 Budget FY13

ProjectionFY14

Estimate

Total Value 111,695.6 112,435.4 112,901.3 113,877.2 114,286.0 116,200.0

% Change 2.5% 0.7% 0.4% 0.9% 1.2% 2.0%

Real Property 102,441.3 103,067.2 104,028.4 105,185.0 105,308.5 107,300.0

% Change 2.9% 0.6% 0.9% 1.1% 1.2% 2.0%Personal Property (non-vehicle) 6,243.6 6,530.2 6,044.8 5,850.0 6,150.0 6,100.0

% Change -2.5% 4.6% -7.4% -3.2% 1.7% 4.1%

Public Service 3,010.7 2,837.9 2,828.1 2,842.2 2,827.5 2,800.0

% Change 0.9% -5.7% -0.3% 0.5% 0.0% -1.5%


Building Permits

10,497 9,861

5,033

3,203 3,542 3,347

4,468

0

2,000

4,000

6,000

8,000

10,000

12,000

2006 2007 2008 2009 2010 2011 2012

New Residential Building Permits January - November for FY 2006 to FY 2012


Property Tax Revenue

$430.6 $451.3

$496.6

$559.4

$618.5 $629.0 $635.3 $645.7 $651.8 $666.3

FY 2005(actual)

FY 2006(actual)

FY 2007(actual)

FY 2008(actual)

FY 2009(actual)

FY 2010(actual)

FY 2011(actual)

FY 2012(actual)

FY 2013(projected)

FY 2014(estimate)

(in millions)

Tax Rate Change Property

Reevaluation and Tax Rate Change

Tax Rate Change


Sales Tax History

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

FY10 Actual FY11 Actual FY12 Actual FY13 Budget FY13 Projected FY14 Estimated

Sales Tax State Hold Harmless


TARGET BASE BUDGET DEVELOPMENT


FY 2014 Target Base Calculations Starting Point

FY 2013 Adopted Budget – Non-salary and benefits

Minus One-Time FY13 Adopted Costs

Plus Projected FY 2014 Salary and Benefit Amounts

Equals FY 2014 Target before BMS Adjustments

Plus/Minus

BMS Adjustments (including adjustments for inter-departmental charges)

Equals FY 2014 Target Base


Increases to Target Base Item # FY 13 Adopted Budget 938,520,000

1 Less Prior Year One-Time Costs (2,780,014)

Salary and Benefit Changes:2 Reduction of Vacancy Rates 768,000 3 Annualization of FY13 Pay Increase 1,000,000 4 Increase in Longevity 33,000

Total Salary and Benefit Changes 1,801,000

5Recurring Board Revisions (Human Services with Corresponding revenues) 972,300

6Eliminate Remaining Reprographics Chargebacks in GSA from Base Budget not adjusted through Salary Projection 166,969

7 Hammond Road items coming off warranty 386,066

Annualization of Justice Center (Non-Salary, Non-Fleet)8 GSA 817,105 9 IS 49,549 10 Sheriff 21,270

887,924


Increases to Target Base (cont’d) 11 Fleet Charges

Lease Rate 92,724 Fuel (does not include a change in rate, consumption changes only) 165,846

Total Fleet Changes 258,570

12 Security Charges (42,241)

13Utility Increases (includes Justice Center and Hammond Road increases) 980,153

14 Building Lease Charges (153,217)

15 Risk Management Charges 516,488

16 Increase in Sales Tax Transfer 1,694,000

Total of Above Items 4,687,998

Unexplained Difference 32,429

FY 14 Target Base 943,240,427


FY 2014 Preliminary Base FY13 Adopted FY14 Base -

11/30/2012Change Notes

RevenuesProperty Taxes 648,962,083 666,388,530 17,426,447 Sales Taxes 121,137,839 128,526,000 7,388,161 All Other Revenues 168,420,078 170,254,850 1,834,772 Still to be adjusted by departments

Revenues Subtotal 938,520,000 965,169,380 26,649,380

Base Expenditures County Departments 389,025,325 392,051,752 3,026,427 WCPSS 318,341,737 318,341,737 - Wake Tech 16,190,938 16,190,938 - Transfers 214,962,000 216,656,000 1,694,000 Adjusted for Sales Tax TransferBase Expenditures in System 938,520,000 943,240,427 4,720,427 Increase in Property Tax Transfer 5,058,238 5,058,238 15.5/53.4 times increase in Property TaxesProjected Base Expenditures 938,520,000 948,298,665 9,778,665

Surplus - 16,870,715 16,870,715

Items to ConsiderWCPSS ?????Wake Tech ?????Employee Pay ?????Health Insurance ?????Additional $$$$ to Debt and Capital ?????State Unemployment Liability ?????Mental Health ?????Other ?????

Surplus (Gap) TBD


But don’t get too excited…… Still many unknowns: • Economy not settled, Fiscal cliff • Hiring freeze to continue due to vacancies

needed for placement of Behavioral Health employees

• New Governor and Long General Assembly Session

• Possibility of WCPSS school bond in 2013 • Health care reform costs


Continued Focus for FY14 • Establishment of priorities through strategic

or business plans • Update of Services Matrix • Strong business cases for budget requests • Prioritization of any reductions or expansions

and identification of how these support long-range plans


Expenditure Adjustments Departments May… Departments May Not…. • Move BMS’s target base budget

between divisions, units, and objects

• Use notes to tell us what happened (very helpful – reduces BMS’s questions)

• Change the bottom line • Make changes to fleet leases,

fuel, utility chargebacks, facility leases, 800 MHz/ CAD and risk management chargebacks (adjusted by BMS)

Revenue Adjustments Departments Should… • Update departmental revenue

estimates based on expected volumes at existing rates

• Submit requests for fee or rate increases via the expansion request form


Operating Budget Calendar Month Day Activity

Dec 12 BUDGET KICKOFF: Special meeting for operating budget kickoff

DecJan

184

PB training for New Users

Jan 18 Departments Enter FY13 Revenue Projections into PB to support Mid-year Projections

Jan 2430

PB Open Lab for Refresher Purposes

Feb 4 Departments submit base requests, expansions, business plans, proposed reductions, contract listings, user fees, budget book text, performance measures, updated service matrices

Feb 15 Board of Commissioners Retreat (Includes mid year review and updated Financial Model)--Materials will be ready one week prior

March / April

Departmental Budget Meetings (CIP & Operating) with David and Joe. Analysts' preliminary analysis complete one week prior to meetings.

May 20 County Manager recommends FY14 Budget to BOC

June 3 Public Hearings

June 10 Budget Work Session with Board of Commissioners

June 17 Adoption of FY14 Budget


Resources can be found at….


Summary • Recent Trends

– Significant Improvement in Property and Sales Tax Growth

– But still many unknowns early in the process

• Reductions Options NOT Required for FY14 • Key Budget Dates

– January 18 – Projection for FY13 Revenues – February 4 – Budget Submissions Due – February 15 – Board of Commissioners Retreat

• Questions???