Agenda Packet February 1 2016PERSON COUNTY
Board of County Commissioners Annual Retreat
February 1, 2016
Kirby Upper Level
213 N. Main St., Roxboro, NC
8:45-9:00 Welcome / Call to Order Chairman Newell & Heidi York
9:00-10:00 Board Priorities and Strategic Plan Heidi York
10:00-10:30 Workforce Impacts Heidi York & Angie Warren
10:30-10:45 Break
10:45-11:15 New Sales Tax Legislation Laura Jensen
11:15-12:00 Audit Report and Fund Balance Jim Winston
12:00-1:00 Lunch
1:00-1:30 Ad Valorem and Vehicle Tax Revenues Russell Jones
1:30-2:00 Fiscal Review & CIP Requests Amy Wehrenberg
2:00-2:15 Break
2:15-2:45 Budget Priorities Heidi York
2:45-3:00 Closing Remarks & Evaluation Chairman Newell
Note: All Items on the Agenda are for Discussion and Action as deemed appropriate by the Board.
1
Fiscal Year 2017 Workforce Impacts2
Current StatusFY15-16Total Number of Fulltime Employees: 395Position Reductions: 8 (7 were vacant)Total Number of Employees Separated: 25 (5 retirees)Turnover Rate: 6.3%3
Pay for Performance (Merit Pay)10%2%45%43%FY14-15IneligibleFails to AchieveAchieves StandardsExceeds Standards7%3%39%48%3%FY15-16 (July-Dec)IneligibleFails to AchieveAchieves StandardsExceeds StandardsPast due4
Pay for Performance (Merit Pay)Cost Estimates 2% “meets standards” and 3% “exceeds standards”FY15-16: $200,310FY16-17: $201,5615
Other OptionsRevamp Merit Pay program?Cost of Living Adjustments (CPI approx. .5%): $78,482Efficiency Gain-sharing Program: $500 bonus Implement Pay and Classification study over three years: $280K/year 16
Health InsuranceClaims/costs are running at 100% of our funding projection (based on 6 mos of data)Paid claims on a per member basis are up 12.5% from last FY3 members are over halfway to max cost ($125,000)Pharmacy costs are concerning; 55% increase from FY14-15 to FY15-16 (6 mos)Renewal early projection: Medical: 20.2% increase, cost est. $3.5MDental: 9% increase Revamp plan? Offer a buy-up option? Premium differential? Wellness incentive?7
Wellness Incentive ProgramCost = $0Cost = $9,816Cost = $20,6142% TrendReduction ProgramParticipationRequirementHealth Assessment50%Biometric Screening50%Disease Management50%8
Priorities?Employee Compensation?Health Insurance Changes?Smaller Government Less employees Less services 9
PERSON COUNTY COMMISSIONERS’FY17 BUDGET RETREATFEBRUARY 1, 2016New Sales Tax Legislation10
Outcomes of the Legislative ChangesExpansion of sales tax base effective March 1, 2016Increased revenue projected to be $84.8 millionPurpose is to provide more resources to rural areas of the state11
Allocations by CountySource: NCACC12
Current RequirementsMust be spent on one or more of the following:Public Education (can include debt service)Community CollegesEconomic DevelopmentNo % distribution requirementMay supplant funding in those areas13
However…Only an estimated amount at this timeWhat form will the county distribution take?Concerns that the General Assembly may “clarify” the current requirements14
OptionsOption 1 – Higher RiskBudget a portion or all of the estimateDecide on distribution to one or more of the three required areasIncrease funding? Or replace current funding?Potential consequencesOver estimate how much will actually be collectedNot easily able to respond to changes from the General Assembly15
Options (continued)Option 2 – More ConservativeDo not budget anything at this pointWait to see what the General Assembly doesWait 6 months to see how much is actually collected and how it is distributed to countiesAmend the budget mid-year, using the requirements at the time as a guide for allocating fundsPotential consequencesDo not get the advantage of using increased sales tax revenue as part of the FY17 budget process16
1Person County June 30, 2015Audit PresentationWinston, Williams, Creech, Evans & Co. LLP17
2OverviewPerson County has received an unmodified opinion on their June 30, 2015 financial statements.Person County again received the Certificate of Excellence in Financial Reporting for fiscal year 06/30/14 and submitted the 6/30/15 report to GFOA.18
3GASB # 34 HighlightsManagement’s Discussion and AnalysisStatement of Net Position2014 2015Total Assets $ 52,185,130 $ 66,021,785DO of Resources- 1,020,774Total Liabilities 16,705,208 15,131,185DI of Resources 79,710 3,985,261Net Position $ 35,400,212 $ 47,926,11319
4Statement of Activities2014 2015Revenues$ 55,924,670 $ 67,510,928Expenditures54,415,997 52,863,027Change in Net Position $ 1,508,673 $ 14,647,901Net Position – Beginning, 33,891,539 35,400,212previously reportedRestatement - (2,122,000)Net Position – Beginning, - 33,278,212restatedEnding Net Position $ 35,400,212 $ 47,926,11320
Governmental Revenues521
6Governmental Fund Expenditures22
7General Fund Revenues010,000,00020,000,00030,000,00040,000,00050,000,00060,000,00070,000,00080,000,000Original BudgetFinal BudgetActual50,572,104 52,299,946 53,242,320 23
8General Fund Expenditures49,000,00050,000,00051,000,00052,000,00053,000,00054,000,00055,000,000Original BudgetFinal BudgetActual52,225,131 54,884,031 50,995,922 24
9General Fund OtherFinancing Sources (Uses)-1,400,000-1,200,000-1,000,000-800,000-600,000-400,000-200,0000Original BudgetFinal BudgetActual(1,215,022)(1,225,713)(1,018,349)25
10Appropriated Fund Balance0500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000Original BudgetFinal BudgetActual2,868,049 3,809,798 -26
11Unassigned Fund Balance-General Fund27
12General Fund UnassignedFund Balance-as a % of Expenditures28
Cash & Investments(Excluding Fiduciary & Agency Funds)1329
14Adjusted Tax Levy05,000,00010,000,00015,000,00020,000,00025,000,00030,000,00035,000,0002006 2007 2008 2009 2010 2011 2012 2013 2014 201530
15Tax Collection Percentages95.59696.59797.59898.52006 2007 2008 2009 2010 2011 2012 2013 2014 201596.8097.8697.9297.3997.4097.6897.6397.7198.4098.7131
1632
IN ADDITION:•ACCEPTANCE OF THE REPORT OF UNPAID TAXES•SET ADVERTISEMENT DATE FOR MARCH 5THAd Valorem & Vehicle Tax Revenues33
Where did the 2015 levy come from?67.21% REAL0.01% OTHER0.33% INVENTORY9.86% MACHINERY21.12% STATE0.48% FARM0.99% OTHER VEHICLE34
What causes the LEVY to change?Real Property-Growth (new construction), splits of parcels, demolitions, changes in exempt status, changes in acreage in deferred (farm use)State Appraised-Changes each year, unpredictable by the CountyEquipment-Additions/Deletions, depreciationRegistered Vehicles-New vehicles/current year depreciation(approximately 42,000 total). Collected by NCVTS (NCDMV).35
Changes in FY2017 Real Property ValuesAdded new construction= +33 Million Actual value for 2015-2016=$2.754 BillionEstimate value for 2016-2017=$2.776 Billion36
Real Property Value Changes, 2006-20160500,000,0001,000,000,0001,500,000,0002,000,000,0002,500,000,0003,000,000,0002006
2007
2008
2009
2010
2011
2012
2013
201420152016
37
Changes in FY2017 Equipment ValuesReduced for additional depreciation= - $38 MNo numbers available for additional equipmentValue for 2016-2017=$385 M38
Equipment Value Changes, 2006-2016050,000,000100,000,000150,000,000200,000,000250,000,000300,000,000350,000,000400,000,000450,000,0002006
2007
2008
2009
2010
2011
2012
2013
2014
20152016
39
State Appraised Property Value ChangesAppraised annually by the StatePerson County will not receive valuation until September 2016Value for 2015-2016 was $865 M, an increase from prior yearDeclined in 2010-2011 and 2011-2012, but increased in 2012-2013 by $47 M to $822 MHighest value was in 2009 at $876 MRecommended value for 2016-2017=$840 M40
State Appraised Property Value Changes 2006 - 2016720,000,000740,000,000760,000,000780,000,000800,000,000820,000,000840,000,000860,000,000880,000,000900,000,0002006
2007
2008
2009
2010
2011
2012
2013
201420152016
41
All Value Changes, 2006-20163,500,000,0003,600,000,0003,700,000,0003,800,000,0003,900,000,0004,000,000,0004,100,000,0004,200,000,0002006
2007
2008
2009
2010
2011
2012
2013
201420152016
42
Changes in FY2017 Registered Motor VehiclesCollected by NCDMV since September 2013Collection rate is better than old systemThis revenue source has continued to trend upwardBudgeting for $190,000 per month in revenues43
Changes in FY2017 Registered Motor Vehicles050,000100,000150,000200,000250,0002014201544
For FY 17, what will one penny generate?Collection Rate Revenue96.00%$423,77196.25%$424,79096.50%$425,80996.75%$426,82797.00%$427,84697.25%$428,86597.50%$429,88497.75%$430,90298.00%$431,92145
Early Payment Discounts-NCGSNCGS 105-360(c)Must be adopted by resolution or ordinance by May 1Adoption must contain period of time for discountAdoption must also contain discount amounts (%)Must be submitted to NCDOR for approvalMust publish discount schedule at least once in newspaper46
Early Payment Discounts-Map.5%.75%1%1.5%2%3%47
Early Payment Discounts-CostsPerson County Collection Rate-August 31, 2015-9%Estimated Collection Rate if 1% discount offered-60% by August 31, 2016Cost of giving a 1%discount=$166,443Revenue from current interest rate=.26% (30-day yield)=$ 14,425Net lossfrom offering discount $152,018If state appraised pays early, additional loss of $55,33048
Early Payment Discounts-Other IssuesSoftware, not NCGS, requires that the City of Roxboro adopt the same discountDiscount will remain in effect unless repealed prior to May 1 of any yearAnyone paying early must receive same discountDiscount applies to all taxes collected (software):Animal taxesStormwaterCity of Roxboro(as stated above)Any new taxes or fees (Fire, etc)49
Person CountyFiscal Review & CIP RequestsPerson County Board of Commissioners Annual RetreatFebruary 1, 2016Amy WehrenbergFinance Director50
2Discussion SummaryMid-Year Comparisons: Revenues and ExpendituresSales and Use Tax DistributionUFB Projection for FY 2016Requested CIP ProjectsDebt Service-FY 2017Trends and Projections51
Revenues: Mid-Year ComparisonREVENUES Dec'14 Dec'15 Difference % Change Ad Valorem Taxes27,270,813 27,348,347 77,534 0.3%Sales & Other Taxes2,354,572 2,660,227 305,655 13.0%Fees & Licenses2,360,728 2,404,460 43,732 1.9%State & Federal Funding3,729,661 3,430,643 (299,018) -8.0%Other Revenues340,129 194,487 (145,643) -42.8%TOTAL36,055,904 36,038,164 (17,740) 0.0%52
Expenditures: Mid-Year ComparisonEXPENDITURES Dec'14 Dec'15 Difference % Change Personnel11,057,763 11,261,299 203,536 1.8%Operating11,486,077 11,963,070 476,993 4.2%Capital663,793 480,306 (183,488) -27.6%Debt Service2,112,759 1,077,538 (1,035,221) -49.0%Transfers toOther Funds680,120 1,050,737 370,617 54.5%TOTAL26,000,512 25,832,950 (167,562) -0.6%NET (Revs over Exp)10,055,391 10,205,214 149,823 1.5%Surplus is result of larger decrease in expenditures than revenues.53
5Sales and Use Tax Distribution-Prior and Projected54
6Unassigned Fund Balance – General Fundas a % of Total Expenditures21.1%17.7%29.2%23.4%30.7%26.3%18.5%18.4%25.2%26.4%*0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*% of Total ExpendituresFiscal YearUnassigned Fund Balance as a % of Total Expenditures* Estimated55
Requested CIP Projects for FY 20177Project TitleEstimate ($)Potential Financing Projects:Senior Center2,870,000 Public SafetyCommunication System Upgrade & Broadband Project4,000,000 Building Maintenance Projects:Roofing-airport, parks, museum, library, and grounds maintenance buildings305,717 New floor-Animal Services60,000 AC units-Animal Services70,000 Miscellaneous Equipment:Tax software (total $750K)375,000 56
8New Construction:Shell building (Total $2.4M, contingent upon other revenue sources)1,120,000 30K sqft pad around Airport50,000 Industrial Park infrastructure (Total $1.5M, contingent upon other revenue sources) 150,000 Northern Satellite facility: EMS335,000 Renovation:Merger-PI/PCRC (includes 10% contingency) 742,720 Helena Satellite facility: Library368,500 Parks & Arts Maintenance Projects:Light replacement-Bushy Fork55,114 Seating-Kirby Auditorium85,000 Restroom facility-Olive Hill63,250 ADA upgrades-all parks60,000 57
9SchoolsRepaving bus lot-PHS90,000 Fire alarm system-NMS150,000 Media upgrades-PHS103,000 ADA upgrades-Woodland Elem50,000 ADA upgrades-Oak Lane Elem75,000 ADA upgrades-North Elem150,000 Bleachers-NMS75,000 HVAC-NMS (total $536K)150,000 Chiller unit-PHS300,000 Window Replacements-Woodland Elem 247,000 New Floor-PCOB (BOE)65,500 Roofing-EI, North Elem, North End390,368 58
10PCC:Allied Health Building (total request $10M) 1,000,000 Roofing-Bldg D, L, & Walkways335,436 Architect study/upgrade-Bldg A (total $575K) 75,000 Generator-Bldg S55,000 Campus alert system117,000 *Renovate-BDEC600,000 *HVAC upgrade-campus wide (total $400K) 100,000 *Architect study-Bldg D (total $1.075M) 75,000 *Upgrade Dining Facility70,000 *Renovate-Bldg E400,000 *Construct road to Allied Health840,605 59
CIP Funding Requests-SummaryCounty Projects: 10.71M (66.0%)School Projects: 1.84M (11.4%)PCC Projects: 3.67M (22.6%)TOTAL REQUESTS16.22MNotes:PCC anticipates funding almost 2.1M*of their requested projects for FY17 (1.3Min FY18) with State bond proceeds should they get voter approval, leaving 1.58M (11.2%) to be considered for funding by the County for FY17.FY16’s total approved projects were 5.5M. The requested increase of 10.7M for FY17 is primarily driven by additional County projects and PCC’s requests.1160
Senior Center Project•The Board voted to demolish existing Senior Center on October 5, 2015 to prepare construction of 12K sqftfacility and development of a community park on adjacent lot.•Total estimated cost at this time is $2.87M. •Architects will be holding a community meeting on February 8thfor public input on the design.•General Obligation (G.O.) Bonds are the least costly financing option available to the County and may be the recommended financing mechanism for this project.•The LGC granted a 3 year extension until November 2018 to issue/sell the bonds at a 20 year term. •A&E contract was approved for $315,200. There is $316,507 remaining in this Project Fund that includes $10,600 spent to date in A&E Fees.1261
Public Safety CommunicationSystem Upgrade & Broadband ProjectThe Board set aside $100K for environmental studies to be done on 4 towers (currently $62,100 remaining).The State will construct 2 towers; leaving 2 towers funded by the County.Latest estimate to construct 2 towers using Viper System with VHF backup and Broadband equipment is $4M(pending results from updated feasibility study). Will consider financing options for this projectCurrent timeline for construction commencement is FY 20171362
Debt Service – FY 201714A significant amount of debt came off for Person County in FY 2016 for $1.96M. The debt cost reduction going into FY 2017 is $295K, but as table above demonstrates, this reduction will likely be offset with new and potential debt, causing an increase to our Debt Service expenditures. DescriptionFY 2017Debt Cost Reduction(295,000)$ New: Roxplex & Various Improvements 143,471 Potential: P.S. Comm Sys Upgrade & Broadband 290,000 Senior Center240,000 Projected Debt Cost Increase378,471$ 63
15Trends and ProjectionsRevenues from Ad Valorem, sales tax, excise and occupancy taxes, PATS and Recreation fees are trending to come in stronger compared to previous year. Primary drivers for the decrease in expenditures include the significant drop-off of FY16 debt, completion of the Kirby Rebirth Project, reduction in fuel costs, absence of elections, position reductions, and decrease in retirement contribution rates.A short-term analysis of revenues and expenditures tentatively indicates an increase of Unassigned Fund Balance at FYE. The additional anticipated revenue should cause a surplus of funds at year-end.Over $16.2M in CIP requests for FY17 to be considered, including potential financing projects (ie. Public Safety Communication System Upgrade & Broadband Project and Senior Center Project).An increase in the County’s debt service costs is likely for FY17 due to new and potential projects. 64