FY 2014 OPERATING BUDGET KICKOFF Budget and Management Services - PowerPoint PPT Presentation

FY 2014 OPERATING BUDGET KICKOFF Budget and Management Services December 12, 2012 1 FY14 Budget Kick-off 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 FY14 Budget Kick-off 2

Budget Staff Chad Balke Rebecca Linthicum Andrea Cain Mark Matthews Meagan Honnold David McNulty Nicole Kreiser Michelle Venditto FY14 Budget Kick-off 3

FY 2014 Process at a Glance Reduction Options NOT Required FY14 Budget Kick-off 4

SO WHY ARE REDUCTION OPTIONS NOT REQUIRED? Let’s take a look at some numbers……. FY14 Budget Kick-off 5

General Fund – 2012 Summary Operating Results Original Final Budget 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. FY14 Budget Kick-off 6

General Fund Revenues Variance with Final Budget - Budgeted Amounts Favorable Original 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 FY14 Budget Kick-off 7

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. FY14 Budget Kick-off 8

General Fund Expenditures Variance with Budget vs. Actual + Encumbrances Budgeted Amounts Favorable Original Final Actual Encumbrances (Unfavorable) $ 42,631,726 $ 46,753,902 $ 44,734,430 $ 636,800 $ 1,382,672 General administration Human services 214,143,720 213,405,177 211,029,938 59,360 2,315,879 330,402,642 330,402,642 330,402,642 - - Education 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 21,081,514 154,765 325,352 100,861,909 102,260,311 101,049,020 105,441 1,105,850 Public safety 209,005,000 209,828,316 209,828,316 - Transfers out Total Expenditures $ 952,100,000 $ 957,967,453 $ 950,993,551 $ 1,123,019 $ 5,850,883 FY14 Budget Kick-off 9

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 FY14 Budget Kick-off 10

General Fund: Fund Balance Summary Increase 2012 2011 (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) General Fund Balance 175,698,244 159,451,859 16,246,385 Subsequent Year's Adopted Budget 938,520,000 952,100,000 (13,580,000) Fund Balance as a Percent of Next Year's Budget 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% FY14 Budget Kick-off 11

FISCAL AND ECONOMIC HISTORY AND TRENDS FY14 Budget Kick-off 12

Budget Changes Since FY 2009 (in millions) $984.4 $971.2 $953.6 $952.1 $951.2 $947.1 $938.5 FY 2009 FY 2009 FY 2010 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Target: Adopted: July Amended: Feb. Adopted: July Amended: Adopted: July Adopted: July Adopted: July December 2008 2009 2009 April 2010 2010 2011 2012 2012 FY14 Budget Kick-off 13

Unemployment Statistics 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% October 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 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% FY14 Budget Kick-off 14

Year-to-Year % Change in Revenue Wake County General Fund Revenue 15.0% Economic Growth Recession Recent Trends 10.0% 5.0% Percent Change Year to Year 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% FY05 to FY06 FY06 to FY07 FY07 to FY08 FY08 to FY09 FY09 to FY10 FY10 to FY11 FY11 to FY12 ALL GF REVENUES PROPERTY TAXES SALES TAXES FY14 Budget Kick-off 15

Property Value (in millions) FY 2010 FY 2011 FY 2012 FY13 Budget FY13 FY14 Projection 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% FY14 Budget Kick-off 16

Building Permits New Residential Building Permits January - November for FY 2006 to FY 2012 12,000 10,497 9,861 10,000 8,000 6,000 5,033 4,468 4,000 3,542 3,347 3,203 2,000 0 2006 2007 2008 2009 2010 2011 2012 FY14 Budget Kick-off 17

Property Tax Revenue (in millions) $666.3 $651.8 $645.7 $635.3 $629.0 $618.5 $559.4 $496.6 $451.3 $430.6 Tax Rate Change Tax Rate Change Property Reevaluation and Tax Rate Change FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 (actual) (actual) (actual) (actual) (actual) (actual) (actual) (actual) (projected) (estimate) FY14 Budget Kick-off 18

Sales Tax History 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 - FY10 Actual FY11 Actual FY12 Actual FY13 Budget FY13 Projected FY14 Estimated Sales Tax State Hold Harmless FY14 Budget Kick-off 19

TARGET BASE BUDGET DEVELOPMENT FY14 Budget Kick-off 20

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 BMS Adjustments (including adjustments for Plus/Minus inter-departmental charges) Equals FY 2014 Target Base FY14 Budget Kick-off 21