1 Part II FY Proposed Budget Clarence C. Monday County Administrator

In This Section Steps taken to develop the proposed budget Steps taken to develop the proposed budget Important Facts Important Facts Budget development goals and strategy Budget development goals and strategy Review of Fiscal Year 2011/2012 and examining Fiscal Year 2012/2013 Review of Fiscal Year 2011/2012 and examining Fiscal Year 2012/2013 Capital budget Capital budget Local School Funding Local School Funding County Employees County Employees Tax rate comparison and proposed tax rates Tax rate comparison and proposed tax rates Budget summary Budget summary Next steps Next steps 2

3 Developing the Proposed Budget Developing the Proposed Budget

4 Steps Taken Departments submitted operating and capital requests Pre-budget work session with the Board of Supervisors Public input session Executive Management meeting with Department Heads to review budget requests Reviewed history of revenues and expenditures Forecasted revenues for FY14 Developed budget goals and priorities Initial Trial Balance Analyzed options to balance the budget Proposed budget completed and presented to the BOS

5 Important Facts Important Facts

6 Important Facts Approximately 80% of the County General Fund budget funds Education and Public Safety. Approximately 80% of the County General Fund budget funds Education and Public Safety. The cost of goods and services purchased by Amherst County continues to rise. The cost of goods and services purchased by Amherst County continues to rise. Effects of recessionary reductions linger, causing department budgets to remain lean, with little flexibility. Effects of recessionary reductions linger, causing department budgets to remain lean, with little flexibility. The County’s Fund Balance is at a stable level and has increased over the past two years due to sound fiscal management and cautious revenue forecasting. The County’s Fund Balance is at a stable level and has increased over the past two years due to sound fiscal management and cautious revenue forecasting.

7 Important Facts Capital expenditures have rightfully been delayed due to recessionary factors. Capital expenditures have rightfully been delayed due to recessionary factors. Changes in the Local Composite Index (LCI) resulted in loss of State Revenue for Local Education totaling $1,126,576. Changes in the Local Composite Index (LCI) resulted in loss of State Revenue for Local Education totaling $1,126,576. “Indicates” the local ability to pay has increased. “Indicates” the local ability to pay has increased. Departments encountered significant changes in their respective budgets totaling $1,834,305 (as presented in pre-budget information) Departments encountered significant changes in their respective budgets totaling $1,834,305 (as presented in pre-budget information) For both operating and capital For both operating and capital

8 Budget Development Goals and Strategy Budget Development Goals and Strategy

9 Budget Goals & Strategy Perform a careful examination of projected revenues and departmental expenditures. Perform a careful examination of projected revenues and departmental expenditures. Provide adequate funding for core government services. Provide adequate funding for core government services. Provide funding for necessary capital projects, especially those requiring immediate attention. Provide funding for necessary capital projects, especially those requiring immediate attention. Utilize carryover funds from last fiscal year to fund capital needs. Utilize carryover funds from last fiscal year to fund capital needs. Maintain adequate Fund Balance for unanticipated & emergency needs, and for future strategic uses. Maintain adequate Fund Balance for unanticipated & emergency needs, and for future strategic uses. Recommend tax increases only when necessary for on-going operating costs. Recommend tax increases only when necessary for on-going operating costs.

10 Review of Fiscal Year 2011/2012 and Examining Fiscal Year 2012/2013 Review of Fiscal Year 2011/2012 and Examining Fiscal Year 2012/2013

11 FY12 Review Slight improvement in local revenues. Slight improvement in local revenues. Had successful year in delinquent tax collections. “Catch up” is starting to diminish. Had successful year in delinquent tax collections. “Catch up” is starting to diminish. Per audited figures, undesignated Fund Balance increased $2,266,175 from the FY11 amount. Per audited figures, undesignated Fund Balance increased $2,266,175 from the FY11 amount. Cautious revenue forecasting. Cautious revenue forecasting. Aggressive, delinquent tax collections. Aggressive, delinquent tax collections. Good fiscal management. Good fiscal management.

12 FY13 Status Report Revenue is where it should be at this time of the year, with slight revenue growth appearing. Revenue is where it should be at this time of the year, with slight revenue growth appearing. 59.9% budgeted Revenue collected as of December 31 st for first half of the FY. 59.9% budgeted Revenue collected as of December 31 st for first half of the FY. Brisk activity reported in Inspections and Planning/Zoning. Brisk activity reported in Inspections and Planning/Zoning. Expenditures are within budgeted parameters. Expenditures are within budgeted parameters.

13 What is Included in the FY14 Proposed Budget? What is Included in the FY14 Proposed Budget?

14 Capital Budget Capital Budget

15 Tier I Capital Projects Included in Budget DepartmentProjectAmount Public SafetyRadios$900,000 Building MaintRoof Replacement at County Admin Building 140,000 Commonwealth’s Attorney Case Management System40,000 Building MaintBuilding Repairs25,000 Public SafetyBuilding Repairs15,000 ParksPlayground Safety Materials 10,000 Public SafetyDuct Repairs5,000 Public WorksTractor63,000 ParksMill Creek Restroom Improvements 68,000 ParksMonocan Park Restroom Improvements 15,000 School DivisionAs Determined500,000 Total This Page$1,781,000

16 Tier II Capital Projects Included in Budget DepartmentProjectAmount Public SafetyVehicle for Director$38,000 InspectionsVehicle for Building Official 23,000 Building MaintenancePainting of County Buildings 50,000 Public WorksBuilding for Machinery and Equipment 40,000 CountyVehicle Replacement26,000 ParksPaving Lake Parking Lots145,000 ParksReplace Park Entrance Signs 90,000 Total This Page$412,000 Total Capital Improvements $2,193,000

17 Local School Funding Local School Funding

18 School Funding Since FY09, State funding has decreased from $26.6M to $20.3M. Since FY09, State funding has decreased from $26.6M to $20.3M. During the same time, the County has increased its local contribution. During the same time, the County has increased its local contribution. County support increased from $14.1M in FY12 to $15.1M in FY13, provided primarily with carryover/unexpended funds. County support increased from $14.1M in FY12 to $15.1M in FY13, provided primarily with carryover/unexpended funds. School Board request for local funding is not expected until late February. School Board request for local funding is not expected until late February. Budget emphasis in FY14 was to 1) maintain this year’s increase in local funds and 2) identify recurring revenue for additional County funds. Budget emphasis in FY14 was to 1) maintain this year’s increase in local funds and 2) identify recurring revenue for additional County funds.

19 School Funding Included in the proposed FY14 budget Included in the proposed FY14 budget Local appropriation$15,853,979 Local appropriation$15,853,979 Maintains current funding (as increased in FY13) and adds additional $750,000 in local funds. Maintains current funding (as increased in FY13) and adds additional $750,000 in local funds. Capital budget provides $500,000 and follows $1M appropriation in FY12 and another $315,671 for roof repairs in FY13. Capital budget provides $500,000 and follows $1M appropriation in FY12 and another $315,671 for roof repairs in FY13.

20 County Employees County Employees

21 County Employees Last actual pay increase was effective July 1, Last actual pay increase was effective July 1, Employees are grateful for the VRS adjustment (offsetting in nature) and for the December 2011 bonus. Employees are grateful for the VRS adjustment (offsetting in nature) and for the December 2011 bonus. Last market analysis was conducted over three years ago and was not implemented due to recessionary constraints. Last market analysis was conducted over three years ago and was not implemented due to recessionary constraints. Last market reclassification was in FY Last market reclassification was in FY Don’t know how much to request for fair compensation! Don’t know how much to request for fair compensation! Amherst County competes for its employees on the open market just like other local governments and the private sector. Amherst County competes for its employees on the open market just like other local governments and the private sector. Employees are our most important asset! Employees are our most important asset!

22 3% Pay Increase Proposed County Full-Time$300,000 County Part-Time$30,000 TOTAL$330,000 Note: The cost of a 3% pay increase is included in the proposed budget for full and part-time County employees. As previously noted, an increase of $750,000 is proposed for the County contribution to education.

23 Personnel Departments identified the need for the following positions and are included in the FY14 Proposed Budget: DepartmentPosition TreasurerDeputy Treasurer I Ground MaintenancePart-time (seasonal) Information TechnologyIT Specialist

24 Personnel Staff has identified the need or potential need for the following positions and are NOT included in the FY14 budget at this time (due to timing, waiting on additional information, etc.) DepartmentPosition EngineeringProject Engineer *Engineering*Storm Water Management *Human Resources*HR Specialist Economic DevelopmentAs Specified in ED plan * Should be addressed early in the fiscal year, pending review of our options and a staff recommendation.

25 Tax Rate Comparison and Proposed Tax Rates Tax Rate Comparison and Proposed Tax Rates

Real Estate Tax Comparison Locality Real Estate Tax Rate Amherst County.52 Appomattox County.575 Bedford County.50 Campbell County.53 Nelson County.60 Average (With Amherst County).545 Average (Without Amherst County).55 26

Personal Property Tax Comparison Locality Personal Property Tax Rate Amherst County 3.25 Appomattox County 4.60 Bedford County 2.35 Campbell County 4.45 Nelson County 2.95 Average (With Amherst County) 3.52 Average (Without Amherst County)

Combined RE & PP Tax Rate Comparison Locality Real EstatePersonal Property Combined Rates Amherst County Appomattox County Bedford County Campbell County Nelson County Average (With Amherst County) Average (Without Amherst County)

29 Revenue Generated from Taxes Diligent efforts were taken to accurately forecast the amount of revenue generated from changes in tax rates. Diligent efforts were taken to accurately forecast the amount of revenue generated from changes in tax rates. There are trends in the percentages of tax revenue collected, varying by tax type, aggressiveness of collection efforts, growth of tax base, etc. There are trends in the percentages of tax revenue collected, varying by tax type, aggressiveness of collection efforts, growth of tax base, etc. “Best” estimates are projected by the increase per penny in the tax rate and may not be actual revenue received from increases. “Best” estimates are projected by the increase per penny in the tax rate and may not be actual revenue received from increases.

30 Real Estate Tax Average RE Tax Rate.55 Amherst County.52 Potential Increase to Match Average Real Estate Tax Rate.03 Potential Revenue Gained by Increasing Real Estate Rate by.03 (to.55) $702,561

31 Personal Property Tax Average PP Tax Rate 3.59 Amherst County3.25 Potential Increase to Match Average Personal Property Tax Rate.34 * not a proposed rate; for illustrative purposes only Potential Revenue Gained by Increasing PP Rate by.34 (to 3.59) $517,548

Proposed Changes In Tax Rates Real Estate Tax Personal Property Tax Current Rate.52Current Rate 3.25 Proposed Rate.55Proposed Rate 3.50 Proposed Increase.03 Proposed Increase.25 Current Average RE Tax Rate.55 Current Average PP Tax Rate 3.59 Revenue Generated by Increase $702,561 Revenue Generated by Increase $380,550 Total Revenue Generated by Increases $1,083, Proposed tax rates were determined in order to provide the necessary revenue to balance the budget.

RE & PP Tax Rate Comparison Locality Real EstatePersonal Property Combined Rates Amherst County Now Average (Without Amherst County) Appomattox County Bedford County Campbell County Nelson County Amherst County After Proposed Increases

Citizen Impact…RE Increase from.52 to.55 Average Value $144,700 Current Tax $ Tax at Proposed Rate $ Impact +$43 34 Figures based on “average” property per $100 of assessed value.

Citizen Impact…PP Increase from $3.25 to $3.50 Average Value $5,870 Current Tax (after 43.45% PPTR, excluding County license fee) $ Tax at Proposed Rate $ Impact +$ Figures based on “average” personal property per $100 of assessed value.

36 The Value & Impact of Changes in Local Tax Rates Real Estate Tax Incremental Increases Amount Generated (based on total assessed value) Tax Impact ( based on “avg” $144,700).01$234,187$15.02$468,374$29.03$702,561$43.04$936,748$58.05$1,170,935$72.10$2,341,870$145.15$3,512,805$217.20$4,683,740$289.25$5,854,675$362

37 The Value & Impact of Changes in Local Tax Rates Personal Property Tax Incremental Increases Amount Generated (based on total assessed value) Tax Impact (based on “avg” $5,870).01$15,222$ $76,110$ $152,220$ $304,440$ $380,550$8.30

38 Budget Summary Budget Summary

39 Proposed Budget Summary Maintains current level of local funds ($15.1M) for Education AND provides another $750,000 for operational needs (total $15.8M). Maintains current level of local funds ($15.1M) for Education AND provides another $750,000 for operational needs (total $15.8M). Utilizes $2.2M of carryover funds for capital projects. Utilizes $2.2M of carryover funds for capital projects. Provides 3% pay increase for County employees. Provides 3% pay increase for County employees. Adds 2.5 employees including Deputy Treasurer I, IT Specialist, and seasonal Ground Maintenance. Adds 2.5 employees including Deputy Treasurer I, IT Specialist, and seasonal Ground Maintenance. Increases Real Estate Tax Rate from.52 to.55 and Personal Property Rate from $3.25 to $3.50. Increases Real Estate Tax Rate from.52 to.55 and Personal Property Rate from $3.25 to $3.50. Provides $1,083,111 in additional revenue to offset $1.1M reduction from change in LCI. Provides $1,083,111 in additional revenue to offset $1.1M reduction from change in LCI. Keeps Amherst County at the average RE rate and below the PP average as compared to regional peer group. Keeps Amherst County at the average RE rate and below the PP average as compared to regional peer group. Maintains adequate Fund Balance for unanticipated & emergency needs, and for future strategic uses. Maintains adequate Fund Balance for unanticipated & emergency needs, and for future strategic uses.

40 Proposal From the Sheriff Received on January 30, 2013 Received on January 30, 2013 Following development of the budget balancing strategy. Following development of the budget balancing strategy. Sheriff’s goal is to inform the BOS as soon as possible. Sheriff’s goal is to inform the BOS as soon as possible. Request Request 1.Place School Resource Officers (SRO) at each County school. Hire (11) additional SROs at estimated cost of $1,045,990 in Year 1. Subsequent years costs diminish after initial equipment is purchased. Hire (11) additional SROs at estimated cost of $1,045,990 in Year 1. Subsequent years costs diminish after initial equipment is purchased. 2.Physical facility improvements at estimated cost of $2,072,469. Bank up funds to cover these costs, phasing in improvements starting in Year 2. Bank up funds to cover these costs, phasing in improvements starting in Year 2. 3.Improve communications. Sheriff suggests raising the Real Estate Tax Rate by.05 to cover such expenses. Sheriff suggests raising the Real Estate Tax Rate by.05 to cover such expenses. Not in proposed budget. Not in proposed budget.

41 Next Steps

42 Next Steps The budget Public Hearing is March 5 at 7:00 PM, Amherst High School. The budget Public Hearing is March 5 at 7:00 PM, Amherst High School. To give proper notice, staff needs direction on the proposed tax rates to advertise. Action required! To give proper notice, staff needs direction on the proposed tax rates to advertise. Action required! Set dates for budget work sessions. Set dates for budget work sessions. Receive and discuss the budget request from the School Board. Receive and discuss the budget request from the School Board. Review department budgets, outside agencies, etc. Review department budgets, outside agencies, etc. Monitor the unknowns at this time such as General Assembly action, request from the School Board, etc. Monitor the unknowns at this time such as General Assembly action, request from the School Board, etc. Tentative date to adopt the county budget and set tax rates is April 16. Tentative date to adopt the county budget and set tax rates is April 16.

43 End of the FY13-14 Proposed Budget r