NON-DEPARTMENTAL. FY 18 Adopted Non-Departmental Budget $170,733,498 NONDEPARTMENTAL FY 16 FY 17 FY 17 FY 18 FY 18 FY 18

Transcription

1 NON-DEPARTMENTAL FY 18 Adopted Non-Departmental Budget $170,733,498 NONDEPARTMENTAL FY 16 FY 17 FY 17 FY 18 FY 18 FY ADP - 17 ADP ACTUAL ADOPTED PROJECTED REQUEST RECOMM ADOPTED $ Change % Change Revenue Sharing $16,058,668 $15,767,084 $15,767,084 $15,855,485 $15,855,485 $15,855,485 $88, % Transfers School Transfer - Ongoing 114,033, ,892, ,892, ,028, ,028, ,028,955 $7,136, % School Transfer - One-Time 8, $0 Capital & Debt Transfer 19,967,916 22,255,548 22,255,548 24,346,207 24,346,207 24,346,207 $2,090, % Transfer to CIP - One-time 1,250, ,950,000 1,200,141 1,200,141 1,200,141 $1,200,141 Transfer to Fire Rescue CIP/Debt 647, , , , , ,251 $42, % Transfer to Water Resources 1,132,128 1,156,443 1,156,443 1,230,689 1,230,689 1,230,689 $74, % Transfer to Economic Development , , ,000 $550,000 Other Transfers 128, , $0 Subtotal, Transfers 137,167, ,965, ,949, ,059, ,059, ,059,243 $11,093, % Other Uses of Funds 687,403 2,336,759 1,941,110 2,906,685 2,906,685 2,818,770 $482, % EXPENDITURE TOTAL $153,913,657 $159,069,172 $165,658,121 $170,821,413 $170,821,413 $170,733,498 $11,664, % NON-DEPARTMENTAL PAGE 191

2 REVENUE SHARING DESCRIPTION AND OVERVIEW The Annexation and Revenue Sharing Agreement between the County of Albemarle and the City of Charlottesville dated February 17, 1982 was approved in a public referendum on May 18, The agreement obligates the County and the City to contribute portions of their respective real property tax bases and revenues to a Revenue and Economic Growth Sharing Fund annually. Distribution of the fund and the resulting net transfer of funds are to be made each January 31 while this agreement remains in effect. Pursuant to the terms of this agreement, the City will not initiate annexation procedures against the County and a committee was created to study the desirability of combining the governments and the services currently provided. The agreement became effective on July 1, 1982 and remains in effect until: The County and City are consolidated into a single political subdivision; or The concept for independent cities presently existing in Virginia is altered by the State law in such a manner that real property in the City becomes part of the County s tax base; or The County and City mutually agree to cancel or change the agreement. FINANCIAL DATA Revenue Sharing with the City of Charlottesville: In FY 18, the County is obligated to pay $15,855,485 to the City of Charlottesville in fulfillment of the revenue sharing agreement provisions, an increase of $88,401 over the FY 17 payment. This payment is the amount calculated through the formula (including population, tax base, rate, and sales ratio) that was agreed upon when the agreement was signed. $15,767,084 $15,855,485 $15,855,485 $88, % The history of payments made over the extent of the agreement is provided on the following table. NON-DEPARTMENTAL PAGE 192

3 HISTORY OF REVENUE SHARING PAYMENTS MADE TO THE CITY FISCAL YEAR AMOUNT OF PAYMENT DOLLAR CHANGE PERCENT CHANGE $1,293,552 N/A N/A ,530, , % ,579,753 48, % ,875, , % ,942,509 67, % ,277, , % ,368,027 90, % ,693, , % ,802, , % ,277, , % ,426, , % ,319, , % ,475, , % ,049, , % ,170, , % ,518, , % ,587,013 68, % ,853, , % ,093, , % ,482, , % ,692, , % ,726,021 1,033, % ,004, , % ,742,748 1,738, % ,134, , % ,212,401 3,077, % ,633, , % ,038,878 4,404, % ,454, , % ,089,812 (364,846) -2.0% ,520,948 (568,864) -3.1% ,931,333 (589,615) -3.4% ,466,981 (464,352) -2.7% ,058,668 (408,313) -2.5% ,767,084 (291,584) -1.8% $15, 855, , % TOTAL $295,948,062 NON-DEPARTMENTAL PAGE 193

4 TRANSFERS DESCRIPTION AND OVERVIEW The transfer of funds from the General Fund to several other County Funds is made each year to pay for public school operations, school debt service and capital projects, general government debt service and capital projects, and stormwater management improvement projects. SCHOOL TRANSFER General Fund Transfer t o School Fund - Recurring: Albemarle County's School Operations are financed from several sources of funding including local, state, and federal revenues and from local tax revenues. The local tax revenues are provided to the School Division by a transfer of funds from the County General Fund. The transfer provides approximately 69% of the money needed to operate the School Division each year, other than school special revenue funds. $116,892,513 $124,028,955 $124,028,955 $7,136, % TOTAL, SCHOOL OPERATIONS $116,892,513 $124,028,955 $124,028,955 $7,136, % OVERVIEW/NOTABLE CHANGES FY 18 Recommended Budget: Per the funding formula with adjustments detailed below, the transfer to the School Division increases $7,136,442, or 6.1%, over the FY 17 Adopted budget. County budget guidelines state, The County shares 60% of the increase or decrease in available shared local tax revenues with the School Board. Available shared local tax revenues are additional or reduced tax revenues that can be used for County and School Division operations after subtracting any increases and adding any decreases in debt service, capital improvement program funding, City of Charlottesville revenue sharing, tax relief for the elderly and disabled, tax refunds, and any shared reserves for contingencies. This guideline may be reviewed annually. 60% of the increase or decrease in shared revenues is allocated to the School Division after certain transfers and expenditures are deducted. Shared revenues include general property taxes, sales tax, consumer utility taxes* (see #6 below), business license tax, vehicle registration, recordation tax, transient occupancy tax, food and beverage tax, and other local tax revenue sources. Though Personal Property Tax Relief (PPTR) is currently classified as State revenue, it is also included in the shared local tax revenue category since the 60/40 formula originated before the PPTR Act was enacted. Deducted transfers/revenues include 1) transfer to capital and debt service, 2) revenue sharing, 3) tax relief for the elderly and disabled, 4) tax refunds, 5) shared contingency reserves, 6) an estimated portion of telecommunications taxes dedicated for E-911 operations which, until recently, was collected and allocated separately by the state. The calculation for the FY18 transfer to the School Division has additional adjustments approved in prior years associated with dedicated funding for the Fire Rescue Services Fund and Water Resources. Prior year adjustments for general government operations, school division operations, and the capital improvement program are incorporated into the base and are no longer part of the calculation. FY 18 Adopted Budget: There were no changes to the Recommended Budget. NON-DEPARTMENTAL PAGE 194

5 (TRANSFERS CONTINUED) County of Albemarle Allocation of Local Tax Revenue Between General Government, Capital/Debt Service & Schools Adopted Adopted $ Change FY 17 FY 18 FY18-FY17 Shared Revenue General Property Taxes 166,891, ,106,549 12,214,866 PPTR 14,960,670 14,960,670 - Other Local Taxes 51,867,478 53,920,084 2,052,606 Increase in Shared Revenue 233,719, ,987,303 14,267,472 Adjustments per Formula Less: Revenue Sharing (15,767,084) (15,855,485) (88,401) Less: E911 Surcharge (1,840,135) (1,840,135) - Adjustments to Formula Less: Dedicated Water Resource Revenue (1,156,443) (1,230,689) (74,246) Less: Growth in Dedicated Fire Rescue Services (2,128,660) (2,934,755) (806,095) Net Projected Local Taxes 212,827, ,126,239 13,298,731 Less: Capital/Debt Service Allocation Prior Year Base 19,622,920 22,255,548 2,632,628 Change based on formula 464,028 1,390, ,631 Transportation Revenue Sharing 250,000 - (250,000) JMRL Lease 345,824 - (345,824) Dedicated to CIP/Debt 1,572,776 - (1,572,776) Total Capital Outlay & Debt Service* 22,255,548 23,646,207 1,390,659 Committed New Non-Departmental Expenditures Tax Relief for the Elderly & Handicapped 910, ,000 - Refunds 167, ,000 14,000 Total Committed New Non-Departmental Exp. 1,077,000 1,091,000 14,000 NET REVENUE 189,494, ,389,032 11,894,071 Recurring Transfer to School Division Prior Year Base 116,892,512 Increase (60% of $11,894,071) 7,136,443 FY18 Total Transfer to School Division 124,028,955 *Note: In addition to the formula transfer, the Capital/Debt Service allocation also received $700,000 from the General Fund. This restores funding removed from the capital program and reallocated to general government in FY16. When this is added, the total allocation to Capital Projects and Debt Service is $24,346,207 in FY 18. NON-DEPARTMENTAL PAGE 195

6 (TRANSFERS CONTINUED) TRANSFER TO CAPITAL AND DEBT General Fund Transfer t o School Debt Service : $13,153,688 $16,133,648 $15,715,180 $2,561, % In addition to the funds for School operational costs, a transfer from the General Fund to the School Debt Service Fund is made each year to make interest and principal payments on money borrow ed by the County for construction and major renovations of school buildings and for other school capital projects. General Fund Transfer t o General Government Debt Service: A transfer from the General Fund to the General Government Debt Service Fund is made each year to make interest and principal payments on funds borrow ed by the County for capital projects that relate to General Government functions. 7,461,657 7,380,113 7,297,727 ($163,930) -2.2% SUBTOTAL, DEBT SERVICE $20,615,345 $23,513,761 $23,012,907 $2,397, % General Fund Transfer t o General Government Capit al 1,640,203 2,032,587 2,533,441 $893, % Improvement Fund: A transfer from the General Fund to the General Government Capital Improvement Fund is made to fund General Government capital projects w hich are funded on a "pay-as-you-go" basis and to provide reserves for future project costs and increased debt service requirements. SUBTOTAL, CAPITAL FUNDS $1,640,203 $2,032,587 $2,533,441 $893, % OVERVIEW/NOTABLE CHANGES FY 18 Recommended Budget: Funding debt service obligations is the first priority of the General Fund Transfer to Debt and Capital. After the debt obligation is met, the balance is distributed to the Capital Improvement Program funds based on the cash needs associated with pay-as-you-go projects. The distribution takes into consideration the cash needs per project net of other available revenues and available fund balance. Overall, the General Fund transfer to capital projects and debt service increases $3,290,800, or 14.8%, over the FY 17 Adopted budget. An increase of $2,979,960 or 22.7% in the transfer to the School Division Debt Service Fund to support the principal and interest payments of the planned spring 2017 issuances. A decrease of $81,544 or 1.1% in the transfer to the General Government Debt Service Fund is the net impact of the existing principal and interest payments decreasing and is offset by the projected principal and interest payments for the planned issuance in spring An increase of $392,384 or 23.9% in the transfer to the School Division and General Government Capital Improvement Funds to support the pay-as-you-go projects. FY18 Adopted Budget: $2.5 million reallocated from the transfer to the Debt Fund to the transfer to the Capital resulting from debt service issuance savings, which results in no increase to the budget. Compared to the recommended budget, the adopted budget reflects the actual debt service issuance interest rates that were lower than estimated. During the Board s March work session, the Board supported staff s recommendation to hold these savings as a reserve and prioritize the use in preparation for rising construction costs. NON-DEPARTMENTAL PAGE 196

7 (TRANSFERS CONTINUED) The following guidelines are used for calculating the formula increase to CIP/Debt Service. Increase or decrease the base capital/debt service transfer by the same percentage increase or decrease as local tax revenue net of revenue sharing. Local Tax Revenue includes the following revenue sources: Real Estate Tax; Public Service Tax; Personal Property Tax; Machinery & Tools Tax; Mobile Homes Tax; Delinquent Tax Payments; Penalties, Interests, and Fees; Sales Tax; Utility Taxes; Business License Tax; Short Term Rental Tax; Vehicle Registration; Bank Franchise Tax; Recordation Tax; Transient Occupancy Tax; Food & Beverage Tax; and Audit Revenues. The base for the calculation can be changed by Board action. The calculation for the Adopted FY 18 transfer to the Capital Projects and Debt Service is shown below. County of Albemarle Allocation of New Local Tax Revenue From General Fund to CIP/Debt Service Adopt ed Adopt ed % Change FY 17 FY 18 FY 18 / FY 17 Net Shared Revenue* $212,827,509 $226,126, % Capit al/debt Service Allocat ion Prior Year Base $22,255,548 Change based on formula (Prior Year Base x 6.2%) 1,390,659 Base Transfer by Formula $22,255,548 $23,646, % Formula Adjust ment s Plus: Restore funding removed in FY16* 700,000 Plus: One-time Transfer from General Fund* 1,200,141 $1,900,141 TOTAL Transfer $25,546,348 *Note: These transfers from the General Fund are from the local government share and are not taken off the top as part of the calculation of the School Division transfer. NON-DEPARTMENTAL PAGE 197

8 (TRANSFERS CONTINUED) TRANSFER TO CAPITAL/DEBT FIRE RESCUE Transfer t o CIP/Debt Service - Fire Rescue: This transfer $660,825 $703,251 $703,251 $42, % from the General Fund is equivalent to 0.4 cents on the real estate tax rate and is designated to fund Fire Rescue capital projects and apparatus purchases. In addition, a transfer is made from the General Fund to the Fire Rescue Services Fund to support operational expenses. The operational component of the transfer is detailed in the Public Safety section of this document. TOTAL, TRANSFER TO FIRE/RESCUE FUND $660,825 $703,251 $703,251 $42, % OVERVIEW/NOTABLE CHANGES FY 18 Recommended Budget: The Fire Rescue transfer to the Capital Improvement Program and Debt Service funds increases $42,426 or 6.4% based on the increased value of a penny on the Real Estate tax rate. For more information, see the Capital Improvement Program and Debt Service chapters. FY 18 Adopted Budget: There were no changes to the Recommended Budget. TRANSFER TO WATER RESOURCES FUND Transfer t o Wat er Resources Fund: This transfer of 0.7 cents on the real estate tax rate to the Water Resources Fund is to support operating, capital, and debt service expenditures associated w ith meeting w ater resources mandates. $1,156,443 $1,230,689 $1,230,689 $74, % TOTAL, TRANSFER TO WATER RESOURCES $1,156,443 $1,230,689 $1,230,689 $74, % OVERVIEW/NOTABLE CHANGES FY 18 Recommended Budget: The transfer to the Water Resources Fund increases $74,246 or 6.4% based on the increased value of a penny on the Real Estate tax rate. For more information, see the Water Resources Fund in the Other Funds chapter. FY 18 Adopted Budget: There were no changes to the Recommended Budget. NON-DEPARTMENTAL PAGE 198

9 (TRANSFERS CONTINUED) TRANSFER TO ECONOMIC DEVELOPMENT FUND Transfer t o Economic Development Fund: This transfer w ill establish the Economic Development Fund as recommended during the FY18-FY19 Tw o Year Fiscal Plan. $0 $550,000 $550,000 $550,000 TOTAL, TRANSFER TO ECONOMIC DEVELOPMENT FUND $0 $550,000 $550,000 $550,000 OVERVIEW/NOTABLE CHANGES FY 18 Recommended Budget: The $550,000 transfer will establish an Economic Development Fund. The purpose of the Economic Development Fund is to match specific state grant opportunities, encourage economic investment in development areas to support neighborhood revitalization, and implement priority economic development initiatives. The FY17 Adopted column reflects amounts funded in a General Fund reserve. Any balances remaining at the end of FY17 will be transferred to the newly established Economic Development Fund. Additional details can be found in the Other Funds chapter of this document. FY 18 Adopted Budget: There were no changes to the Recommended Budget. NON-DEPARTMENTAL PAGE 199

10 NON-DEPARTMENTAL PAGE 200

11 DESCRIPTIONS AND FINANCIAL DATA OTHER USES OF FUNDS Refunds: An amount is appropriated each year to pay refunds ow ed by the County. BOS St rat egic Priorit y Support : This reserve w as established as part of the Tw o Year Fiscal Plan to provide funding to support implementation of Strategic Plan initiatives. Proposed use of this funding is specifically to support the Pantops Master Plan/Rivanna River and the Department of Social Service's (DSS's) Finding Families pilot program. Neighborhood Improvement Program: This funding is for a pilot program envisioned to fund smaller scale neighborhood improvements that w ill benefit place-making and/or quality of life in a given neighborhood. Priority projects to be considered for funding w ill be identified based on a community engagement process that w ill include leadership from the County's Community Advisory Committees (CACs). Staff w ill be meeting w ith the CACs over the next several months to identify and prioritize potential projects that w ill be presented to the Board in May 2017, w ith the Board to provide further direction regarding funding allocation after that presentation. $1.4 M is identified for projects. An additional $200,000 is included for potential support costs. $167,000 $181,000 $181,000 $14, % 0 100, ,000 $100, , ,342 $117,342 Transformat ional Init iat ives: This reserve w as established as part of the Tw o Year Fiscal plan to provide funding for transformational initiatives. Proposed use of this funding in FY18 includes $25,000 to study converting the copy center to an imaging center, $75,000 for a technology needs and resources assessment, $100,000 for a temporary project manager to oversee implementation efforts, and $75,000 for costs associated w ith implementation of initiatives. Grant s Leveraging Reserve: This fund is used as a source for grant matches that arise throughout the year. This fund is used w hen departments are unable to identify matching funds w ithin their existing budgets. Innovat ion Fund: Funding is set aside for onetime organizational initiatives that reduce costs and improve customer service and productivity , ,000 $275, , , ,000 $0 0.0% 75, , ,000 $75, % NON-DEPARTMENTAL PAGE 201

12 (OTHER USES OF FUNDS CONTINUED) Salary & Benefit s Reserve: This reserve provides funding for changes in departmental salaries and benefits, including implementation of classification studies, succession management, leave payouts, changes in health insurance elections, and changes to long-term and short-term disability benefits. Implementation of a public safety classification study is anticipated for a partial year in FY18. The Fire Rescue portion of this impact is budgeted in the Fire Fund. Compression Reserve: This reserve is set aside to address salary compression issues across the County. Compression occurs w hen there is only a small difference in pay betw een employees in the same job, regardless of their skills or experience. The portion of compression associated w ith Fire Rescue is included in the Fire Rescue Services Fund. Disabilit y Reserve: This provides funding to implement changes to long-term and shortterm benefits provided through the Virginia Retirement System. In FY18, this is being combined w ith the Salary & Benefits Reserve. Early Ret irement Funding: These funds are set aside for current as w ell as projected Voluntary Early Retirement Incentive Program (VERIP) recipients. Training Pool: Funding is set aside to address the Board's strategic direction to support an evolving w orkforce and increase training opportunities for employees. Fuel & Ut ilit ies Cont ingency: The County has forecasted the price per gallon of regular gasoline to be $2.02 during FY 18, after federal and state taxes are removed. This contingency is available for use if the average price per gallon exceeds $2.02. In addition, this reserve contains funding set aside for any unforeseen fluctuations in energy costs or severe w eather conditions requiring increased utility usage. 150, , ,000 $60, % 0 326, ,500 $326,500 10, ($10,000) % 768, , ,185 ($19,565) -2.5% 51,000 59,000 59,000 $8, % 257, , ,000 ($1,000) -0.4% Efficiencies/Savings: In FY17, the County expected to achieve efficiency savings through cooperative procurement practices and more extensive use of the purchase card (P-card) program. Priorit y Based Budget ing Support : Funding w as set aside in FY17 to support a prioritybased budgeting process that assisted the County w ith directing resources to the community's highest valued services and programs. This resulted in the balanced FY18- FY19 Tw o Year Fiscal Plan and led directly to funding decisions in the FY18 Recommended annual budget. (150,000) 0 0 $150, % 50, ($50,000) % NON-DEPARTMENTAL PAGE 202

13 (OTHER USES OF FUNDS CONTINUED) Efficiency St udy: Funding w as set aside to support an external efficiency study that w as to build on the results of the joint schools/local government efficiency study completed in 2016, examining internal operations but also focusing on regional opportunities and other aspects that w ere not w ithin the scope of the recent in-house study. A portion of this funding w as identified to be utilized to support the undertaking of previously identified efficiency efforts. 125, ($125,000) % Projected uses in FY17 include: - $30,000 to HR to digitize employee records - $50,000 to IT to begin implementation of Microsoft Office365 licensing program that w ill reduce the number of servers required by the County to be on site - $20,000 for a portion of w ebsite redesign costs (remaining $30,000 to come from salary lapse in the Information Technology budget) Reserve for Cont ingencies: Contingency 323, , ,743 ($28,266) -8.8% funds are set aside to provide funds for unanticipated priority needs. TOTAL, OTHER USES OF FUNDS $1,926,759 $2,906,685 $2,818,770 $892, % NON-DEPARTMENTAL PAGE 203

14 UNBUDGETED FUND BALANCES AND RESERVES Unassigned Fund Balance The County has a financial policy to set aside funding in a 10% unassigned fund balance. The County does not intend, as a common practice, to use General Fund equity (unassigned fund balance) to finance current operations. If circumstances require the use of the unassigned fund balance that causes the balance to fall to a point below the 10% target level, the County will develop a plan during the annual budget adoption process to replenish the unrestricted fund balance to the 10% target level over a period of not more than three (3) years. At the close of each fiscal year, the unassigned General Fund fund balance, plus the committed fund balance available for fiscal cash liquidity purposes, should be equal to no less than 10% of the County s total operating revenues, which includes the General Fund plus the School Fund. In FY18, this would require a minimum unassigned fund balance of $31.3 million. In addition to the 10% fund balance reserve, funds are set aside for various policy uses (see calculation below). Funds in excess of the policy use of fund balance may be considered to supplement pay as you go capital expenditures or as additions to the fund balance. (Amended by the Board of Supervisors on August 1, 2012) The audited General Fund fund balance as of June 30, 2016 is $47.9 million. A total of $35.3 million is required to meet the County s policy use of fund balance requirements and $99.3 million is required for uses currently appropriated in the FY17 budget. General Fund Estimated FY17 Fund Balance AUDITED FUND BALANCE JUNE 30, 2015 $ 39,855,507 Total FY16 Revenues $ 255,159,730 Total FY16 Expenditures and Net Transfers $ (247,082,167) Net Change in Fund Balance $ 8,077,563 AUDITED FUND BALANCE JUNE 30, 2016 $ 47,933,070 Policy Use of Fund Balance 10% unassigned fund balance reserve $ 31,328,082 General Fund - School Reserve Fund $ 1,397,998 Committed $ 728,372 Unspendable Fund Balance (Inventory & Prepaids) $ 110,587 Rainy Day/Stabilization Reserve (policy pending) $ 1,750,000 Subtotal, Policy Use of Fund Balance $ 35,315,039 Appropriated Use of Fund Balance FY17 Adopted Budget $ 1,316,000 Health Fund Infusion (FY17) $ 430,414 Other Appropriated Uses of Fund Balance (FY17) $ 7,595,833 Subtotal, Appropriated Use of Fund Balance $ 9,342,247 Audited June 30, 2016 Fund Balance $ 47,933,070 Policy Use of Fund Balance $ (35,315,039) Appropriated Use of Fund Balance $ (9,342,247) Un-appropriated General Fund Fund Balance $ 3,275,784 NON-DEPARTMENTAL PAGE 204

15 The following chart projects sources and uses of currently un-appropriated General Fund fund balance. Planned Sources and Uses of Fund Balance Sources: Un-appropriated General Fund Fund Balance $ 3,275,784 TOTAL SOURCES $ 3,275,784 Planned Uses: FY17 Uses Transfer to CIP - Acquisition of Conservation Easements (ACE) $ 250,000 Neighborhood Initiatives Funding (program under development) $ 1,400,000 Subtotal, FY17 Uses $ 1,650,000 FY18 Uses Board's Strategic Priority Support $ 100,000 Economic Development Investment Opportunities Support $ 400,000 Economic Opportunities Fund $ 150,000 Transformational Initiatives $ 275,000 Fuel & Utilities Contingency $ 256,000 Grants Matching Fund $ 100,000 Innovation Fund $ 150,000 Staffing Plan One-Time Costs $ 169,758 Subtotal, FY18 Uses $ 1,600,758 TOTAL PLANNED USES $ 3,250,758 Available Fund Balance (Total Sources - Total Planned Uses) $ 25,026 NON-DEPARTMENTAL PAGE 205

16 NON-DEPARTMENTAL PAGE 206