FY BUDGET MESSAGE

Transcription

1 BOARD OF COMMISSIONERS ELMO BUTCH LILLEY, CHAIRMAN TOMMY W. BOWEN, VICE CHAIRMAN RONNIE SMITH DEREK PRICE BOB HYMAN FY BUDGET MESSAGE DAVID B. BONE COUNTY MANAGER MARION B. THOMPSON CLERK TO THE BOARD PO BOX 668 WILLIAMSTON, NC PHONE (252) FAX (252) SUMMARY OF PROPOSED BUDGET AND KEY ISSUES TO: FROM: Chairman Butch Lilley Vice-Chairman Tommy Bowen Commissioner Ronnie Smith Commissioner Derek Price Commissioner Bob Hyman David B. Bone, County Manager DATE: June 7, 2012 Dear Commissioners: In accordance with the General Statutes of North Carolina, I respectfully submit for your review and consideration the Budget for the County of Martin for Fiscal Year The budget was prepared in accordance with the North Carolina Local Government and Budget Fiscal Control Act. This budget is balanced and identifies revenue and expenditure estimates for Fiscal Year (FY) The FY Budget totals $30,138,940 for all county operations, capital improvements and debt service requirements. The FY Budget is based on a continuation of the property tax rate of $0.67 per $100 valuation. This document represents the recommended budget, as is required by the NC General Statutes. This budget is not the manager s budget it is the Board s budget. The Board had already provided feedback and input through a budget work session held on May 23, The Budget as a Decision-Making Tool One of the critical purposes of this document is to encourage open dialogue, questions, and public deliberation as it relates to how best citizen tax dollars can be used to serve the community. Martin County faces difficult choices over the next several years that will impact the services citizens 1

2 desire, counter-balanced by the price they are willing to pay on their annual tax bills. Ideally, the proposed budget will be successful in identifying key issues, needs, costs, and implications of decisions so the governing board and public can decide how they want their county government to operate next year. FY BUDGET SNAPSHOT TAX RATE: Budget based on tax rate remaining constant at $0.67 per $100 valuation; however, the manager recommended a 3- cent increase in the tax rate to begin decreasing the dependence on Fund Balance of the General Fund and the Hospital Fund WATER RATE: Budget based on an approximate 10% increase in the water rates (an increase the base rate from $27 to $30 and an increase in the usage fee from $4.50 to $5 per additional 1,000 gallons) RAISES: No COLA for employees HEALTH INSURANCE COSTS: No increase in health insurance costs PERSONNEL: No new full-time positions added EDUCATION: Funding Martin County Schools at same level as last year; small increase in the allocation to Martin Community College CAPITAL PROJECT SHELL BUILDING: Re-appropriation of $1.1 million in Hospital Funds for the construction of a shell industrial building in the County s Industrial Park CAPITAL OUTLAY: Major Capital Outlay expenses include the purchase of 5 cars in the Sheriff s Office, roof replacement on a portion of the Health Department, 2 vehicles in Transit, one vehicle for Building Inspections and $25,000 for continued improvements to the data network Budget Emphasis The emphasis of this budget is maintenance of current levels of service while keeping tax rates as reasonable as possible. Revenue continues to be down from levels received in the mid 2000 s. The value of personal property has decreased $87 million from last year, and sales tax revenues and revenue from investments continue their downward trend. During the fiscal year, Martin County received $4.9 million in sales tax and $496,000 in investment earnings. This year, , we have budgeted approximately $3.87 million and $24,000 for these items respectively. The budget before you is a conservative budget in attempting to provide the level of services that our citizenry has become accustomed. The budget before you is approximately $30,138,940, with about $9.01 million in educational funding and about $6.3 million in Social Services funding. The $30,138,940 budgeted (including the Aging and Transit Departments) in expenses, as compared to the revised budget of $30,684,083 in (a decrease of 1.78%). 2

3 Use of Savings The manager recommended a 3-cent increase in the tax rate to begin decreasing the dependence on the Fund Balance of the General Fund and the Hospital Fund; however, this budget is based on the maintenance of the tax rate at $0.67 per $100 valuation. Without a tax increase, a revenue deficit requires the use of $3,770,693 in savings from the following sources: $2,470,693 in Fund Balance from the General Fund $1,100,000 transfer from the Hospital Fund (re-appropriation of $1,100,000 for shell building) $200,000 in Capital Reserves (from Article 46 Sales Tax reserves) This amount of use of the Fund Balance of the General Fund will take the County very close to the 8% minimum Fund Balance required by NC General Statute. The Hospital Fund consists of lease payments paid in advance for a 30-year lease, which was entered into in /30 th of these funds are considered earned for each year of actual use of the hospital building. Accounting principles dictate that the County should not spend lease payments until they have been earned. In the Hospital Fund, as of June 30, 2011, the County had $16,016,113. The unearned revenue in the Hospital Fund as of June 30, 2011 was $9,774,998. With the $1,100,000 budgeted from the Hospital Fund for FY , it is anticipated that the Hospital Fund will have approximately $14.8 million remaining as of June 30, Approximately $6.16 million of the $14.8 million remaining would be considered earned at that point, and $8.64 million would be unearned. Continued use of the County s savings at the current level can remain a budgeting strategy for a finite time. The only ways to decrease the reliance on savings is to increase revenues or reduce expenses. However, if further significant cuts are made, the level of service being provided to the citizens of Martin County will be impacted. Additional revenues can be raised either by growth in a particular revenue stream or increasing the rate of revenue charged, such as increasing a fee for service or an increase in the tax rate. At this point in time, our revenue streams are decreasing, not increasing. Personnel This budget has been prepared without the elimination of any staff or any furloughing of staff. No salary increase for employees is included in the budget. Funding of the 401(k) contribution is maintained at 3%. The County was able to negotiate a 0% increase in health insurance costs for the upcoming year, so the County will not have an increase in health insurance coverage for employees, and there will be no increase in the employees cost for dependent health insurance coverage. No new full-time positions are included in the budget. The Sheriff s Office, Communications Department and Inspections Department each requested an additional full-time position. $10,000 for part-time salaries was included for the Communications Department and maintained for the Inspections Department. 3

4 A new Employee Wellness Program is slated to begin in $16,250 has been included in the budget for employee health screenings / coaching in an effort to improve employees health and limit future health insurance rate adjustments. Budget Includes the General Fund, Enterprise Funds and Other Funds The County budget is composed of revenues and expenditures for several funds, including the General Fund, the Water District (Enterprise) Funds and Other Funds. The General Fund accounts for resources traditionally associated with government that are not required legally or by sound financial management to be accounted for in other funds. Enterprise Funds consist of a grouping of activities whose expenditures are wholly or partially offset by revenues collected from consumers in form of fees and charges. Enterprise funds are traditionally run more like a business. The other funds included in this document are: 1. NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds o Fire District Fund accounts for the revenues of the seven fire districts in Martin County. o Emergency Telephone Fund this fund was established in accordance with North Carolina law to account for the accumulation of telephone surcharges to be used for emergency telephone systems. o Scattered Site CDBG accounts for the community development block grant that is funding housing repairs throughout the county. o Controlled Substance Tax Distribution Fund accounts for funds received from the NC Department of Revenue to support law enforcement. Capital Project Funds o Human Service Building Fund accounts for funds used in the construction of a human services building. o Moratoc Park Improvement Project Fund accounts for funds to be used in upgrading Moratoc Park. o Business Park Fund accounts for the community development block grant that is funding the construction of a water main, sewer main, and rail spur track to serve the Martin County Regional Business Park in Everetts. o Airport Expansion Fund accounts for funds to be used in expanding the Martin County Airport. 2. TRUST AND AGENCY FUNDS Private Trust Funds o Mary W. Taylor Fund for the Hearing Impaired accounts for the principal and related interest of the Mary W. Taylor Expendable Trust, pursuant to a bequest that restricts the use of such funds. o Carrie Biggs Morrison Trust accounts for the principal and related interest of the Carrie Biggs Morrison Expendable Trust Fund pursuant to a trust agreement that restricts the use of such funds. 4

5 Agency Funds o Tax Agency accounts for the proceeds of taxes that are collected by the County on behalf of the municipalities within the County. o Social Services accounts for moneys held by the Social Services Department for the benefit of certain individuals in the County. o Fines and Forfeitures accounts for money received from fines and forfeitures that are required to be remitted to the Martin County Board of Education. o Motor Vehicle Tax Interest accounts for state-mandated interest collected on behalf of the state for motor vehicle processing. This money is passed-on to the state. o Deed of Trust Fee Fees collected through the Register of Deeds and turned-over to the state. o Albemarle-Tideland Retirees accounts for money held for the benefit of health insurance retirement benefits for retirees of dissolved entities Albemarle and Tideland Mental Health. Capital Project Shell Building The use of $1.1 million in Hospital Funds has been re-budgeted for the construction of a shell industrial building in the County s Industrial Park. These funds will match grant funds from the Golden Leaf Foundation. This project was included in the Budget, but construction of the project has not yet begun. Capital Outlay Major Capital Outlay expenses include the purchase of 5 cars in the Sheriff s Office, roof replacement on a portion of the Health Department, 2 vehicles in Transit, one vehicle for Building Inspections and $25,000 for continued improvements to the data network. Debt Service No new debt service is scheduled in the FY Budget. Looking Ahead Several issues are in the foreseeable future for Martin County. The Board of Commissioners may want to keep these items in mind in preparation for the FY Budget process. These issues include the following: 1. Continued use of the County s savings at the current level is not sustainable in the long run. 2. Expect further cuts in federal and state spending as those governments deal with their own budget issues. 5

6 3. With the current political climate, major changes in the state and federal government political landscape could occur after the state and federal elections in the fall. In the NC Legislature, at least a third of the state s legislators will not return to their seats in Of the 170 legislators in the NC General Assembly, at least 49 members including 26 Republicans and 23 Democrats will not return next year, due to officials choosing not to run, as well as redistricting. 4. As Martin County Schools Superintendent Ron Melchiorre mentioned in the joint Board of Commissioners Board of Education meeting on May 15 th, the County and Martin County Schools needs to be observant of the Low-Wealth Supplemental Funding formula. Martin County Schools received $1.3 million in this type of funding in Eligibility for this funding is based on several factors, but one requirement is that the County s tax rate level must be equal to 100% of the State Average Effective Tax Rate. 5. This will be the last year the County receives the Article 44 ½-cent sales tax Hold Harmless revenue (estimated at $100,000), unless legislation is passed in the NC Legislature. 6. The FY Budget and other budgets moving forward will include a reduction in ABC Board disbursement. The Board of Commissioners agreed for the ABC Board to keep half of its profits for a building fund. Conclusion Planning and preparing for the future is fundamental to the effective governance and management of a County. The FY Budget provides a high level of service to our residents in an open and fiscally responsible manner. This budget attempts to hold down expenditures wherever possible, but at the same time, recognizing the needs of the community. The County staff has worked diligently to present you with a balanced budget which will meet the needs of our citizens while striving to be good stewards of the funds which they have entrusted to us. I offer my gratitude to Finance Officer Cindy Ange, County Clerk Marion Thompson and the entire staff for their help preparing this budget. I also thank the Board of Commissioners for its input in the development of the budget and for its continued support of the County staff. Respectfully submitted, David B. Bone County Manager 6