Maricopa County Budget Process Association of Government Accountants Phoenix Chapter November 20, 2019
Maricopa County Board of Supervisors Steve Gallardo Jack Sellers Steve Chucri Bill Gates Clint Hickman District 5 District 1 District 3 District 2 District 4 Chairman 2
About Maricopa County • 4th Largest County in the Nation • Fastest Growing County in the Nation • Budget for over 14,000 positions 3
Budget and Accountability Policy • Structural Balance • Baselines/ZBB ▫ Operating • Non Departmental ▫ Non Recurring • Reserves/Contingencies • Lump Sum • Fund Balances ▫ Appropriated Level ▫ Detail Budget • Major Maintenance • Budget Guidelines • Capital Improvement • Fully Funded Position • Budget Adjustments ▫ Full Year • On-going Monitoring/Review ▫ Personnel Savings • Forecasts 4
Maricopa County Budget Process • Budget Development • Budget Management • Budget Monitoring 5
Budget Development Process • Forecasts • Calendar Development ▫ 5-year Forecast ▫ Timeline ▫ Economic Forecast and Revenue ▫ Submission Due Dates Update ▫ Presentations ▫ Current Year Forecast • Presentations • Budget System/Submissions ▫ Elected/Judicial Officials ▫ Internal Service Budgets ▫ Staff Presentations (ZBB and ▫ ZBB’s other requests) ▫ Departments ▫ Capital Projects • Budget Guidelines ▫ Strategic Priorities ▫ Economy 6
Forecasts • 5-year Forecast for Major Funds ▫ Final Step in Budget Development Revenue Assumptions Growth Assumptions • Initial Current Year ▫ Economic Update ▫ Major Revenue Forecast Quarterly State Shared Sales/State Shared VLT/Jail Excise No County General Sales Tax 7
Budget Calendar • Review Timeframe • Start drafting in late August/early • Non Recurring/Capital Review September Dates • System Preparation and Rollout • Consolidation • Guideline Adoption • Tentative Adoption • Department Due Dates • Final Adoption • Presentations • Tax Levy/Rate Setting 8
Budget System Department/Unit/Fund/Activity/Appropriation Unit/Object/Program • Personnel budget is by • Supplies position ▫ Salary - incumbent rate/vacant at midpoint • Services ▫ Taxes ▫ Retirement - by plan ▫ Other (Life Insurance) • Capital ▫ Health/Dental – weighted average rates based on plans/tiers ▫ Personnel Savings • Budget system allows for comments • Separate budgets for on-going vs. one-time expenditures • System opens for department budget development in October/November 9
Personnel Forms 10
Supplies/Services/Capital Forms 11
Grant Detail Form 12
ZBB Form 13
Presentations • Elected/Judicial Officials Presentations to the Board of Supervisors ▫ December/early January ▫ Ideally prior to adoption of budget guidelines ▫ Identify pressing issues/needs for the next year 14
Budget Guidelines • Structural Balance • Property Taxes • Revenue Assumptions • Compensation Assumptions • Retirement Funding • Baseline Adjustments ▫ Items required by state law ▫ Annualization of current year changes 15
Budget Guidelines (continued) • Initiatives/Reductions • ZBB • Contingency and Reserve Requirements • Non Recurring/Capital Project Direction • Expenditure Limitation • Requests that do not meet guidelines must have prior approval of Board to allow for review 16
Budget Submissions • Internal Service Budgets • ZBB Budgets • Operational Departments • Capital Improvement Program • Separate Budgets for On-Going vs. One-Time 17
Department Budgets • Internal service charges are centrally loaded into department budget requests • Central Service Cost Allocation charges are centrally loaded into department budget requests • Interdepartmental allocations are centrally loaded into department budget requests 18
Department Budget Submission • Personnel budget is by position • Supplies • Services • Capital • Non Recurring Requests ▫ Carryforward ▫ New • Business case to support change to resources 19
Presentations and Analysis • Staff Level Presentations to Board Chiefs of Staff ▫ ZBB’s/Elected and Judicial/New Requests ▫ Discuss submission ▫ Present business case/additional information for requests • Budget Office Analysis ▫ Review historical trends ▫ Economic considerations ▫ Business case review 20
Current Year Forecast • Quarterly Major Revenue Forecast from Economist • Departmental and Budget Office Forecasts ▫ In Budget System and same forms/format as budget • Monthly (Budget and Forecasts are calendarized) • Forecast determines funding for non recurring items, capital improvements, technology projects and reserves for future projects ▫ Based on forecast after January close (7+5) 21
Change to Budgeting Philosophy Current Philosophy Previous Philosophy • Most Likely Revenues • Pessimistic Revenues • Contingencies based on Historical • Large Contingencies Utilization and Risk Exposure • Conservative Current Year • Tighter Forecasts Forecasts Modified Pay-As-You-Go Capital Modified Pay-As-You-Go Capital AND Capital Project Financing (within current operating budget) 22
Non Recurring/CIP Budgets Sources of Utilization of Non Recurring Funding Non Recurring Funding • Current year revenues in excess of • Departmental Non Recurring budget items • Current year expenditures below • Capital Improvements budget • Technology Improvements • Prior year fund balance in excess of • Reserves for Future Projects estimate 23
CIP Process • Resources Identified • Presentation of Prioritized Projects from CIP Departments to Leadership • Determine Projects Able to Fund With Non Recurring Resources ▫ One-time Purchases ▫ Full Funding for CIP Project – CIP is a 5-year plan • CIP Departments Presentation to Chiefs of Staff • Staff Recommendation of Utilization of Non Recurring Funding 24
Final Steps • Consolidation • Presentation to Board • Tentative Adoption • Notice Publication • Public Hearing/TNT Hearing if needed • Final Adoption • Tax Rate Setting • Document Publication ◦ Citizens’ Budget Brief ◦ Complete Budget Document 25
FY 2020 Adopted Budget Sources of Funds: $2,573,762,798 Miscellaneous & Interest State Shared Sales Tax 0.84% 23.75% Highway User Revenues 4.73% Sales Taxes 6.93% State Shared Vehicle License Taxes 7.48% Other Intergovernmental & Grants Property Taxes, Penalties and 9.48% Interest 23.59% Permits, Patient Revenue, Fees Fines & Charges Fund Balance 10.44% 12.76% 26
FY 2020 Adopted Budget Uses of Funds: $2,573,762,798 Public Safety Highways & Streets 52.77% 8.16% Culture and Recreation 0.86% Education 0.83% Health, Welfare and Sanitation 22.56% Other* 14.82% *Other = Assessor, Recorder, Elections, Treasurer, Internal Audit, County Manager, Assistant and Deputy County Managers, Clerk of the Board, Board of Supervisors, Finance, Budget, Procurement, Human Resources, Risk Management, Real Estate, Equipment Services, Facilities Management, Enterprise Technology, Non Departmental 27
Constitutional Tax Levy Limit • For fiscal year 2020 $850 Maricopa $746 $775 $628 $656 $684 $713 County is $700 $606 $140.5 $581 $625 $558 million $538 $605 $518 $550 $464 $492 below the Millions $566 $536 maximum Maximum Levy Actual Levy $475 $492 $492 $506 $463 $478 $443 $471 levy $400 $425 $410 allowed $325 by state $250 statute. $175 $100 28
Maricopa County Combined Property Tax Rate $1.65 $0.0556 $0.0556 $0.0556 $0.0556 $1.60 Library $1.55 Flood Control $0.1792 $0.1792 $0.1792 $0.1792 $1.50 $1.45 County Primary $1.40 $1.35 $1.4009 $1.4009 $1.4009 $1.4009 $1.30 $1.25 FY 2017 FY 2018 FY 2019 FY 2020 29
County Primary Property Taxes make up 11.43% of Total Property Taxes 30 Flood Control and Library Districts included in Other Special Districts
Budget Management • Calendarize Budget • Board Approved Adjustments ▫ Contingency • Updated Monthly and Submitted to Financ e 31
Budget Monitoring • Monthly Variance Commentary • Department of Finance • Focus on General and Detention Funds (Largest and tax based funds) • Budget Office • All funds • Monthly Forecast • Departmental and Budget Office Forecasts • Calendarized • In Budget System and same forms/format as budget • Quarterly Major Revenue Forecast from Economist • Forecast determines funding for non recurring items, capital improvements, technology projects and reserves for future projects 32
Questions ?? Thank you! 33
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