1. COUNTY OF WARREN BUDGET PRESENTATION FY 2008-09 Linda T. Worth, County Manager

2. ANNUAL BUDGET SUBMISSION In accordance with the Local Government Budget and Fiscal Control Act, I submit to you the recommended Fiscal Year 2008-09 Budget for Warren County. This proposed budget is respectfully submitted as a working document.

3. Budget Components GENERAL FUND REVALUATION FUND E-911 FUND FIRE TAX DISTRICT FUND ENTERPRISE FUNDS –Regional Water –District I Water –District II Water –District III Water –Solid Waste

4. FACTORS The current economic downturn fueled by record job losses, a stagnant housing industry, rising fuel, utility, food, healthcare and prescription drug costs will have a substantial negative affect on Warren County’s operating costs and revenue generation in FY 09. Employee health insurance rates increased 24.8% based on our current health benefits package. To make this coverage affordable for the County, I am recommending changes in the benefits package that will reduce the rate increase to 14.4%. Dental rates increased 12.8%. The increase in health insurance is estimated to be $246,617. The Library will be completed in early FY 09. Increases in staffing, operating expenses, and debt service will be approximately $302,727.

5. FACTORS cont’d. Medicaid The State of NC has begun its permanent takeover of Medicaid. However, Warren County will lose over $204,000 in sales taxes in FY 09 as part of the State’s Medicaid Relief Plan and will share in 50% of the anticipated Medicaid costs for Warren County in the amount of approximately $1,090,000.

6. Factors cont’d. FUND BALANCE -In FY 08 a total of $3,949,190 was appropriated from Fund Balance to help meet expenses in the General Fund. -$3,500,181 of the $3,949,190 was appropriated from Undesignated Fund Balance. -There will be an estimated loss of $2,212,652 in Fund Balance in FY 08. -It is anticipated that Fund Balance will gain only $73,000 in FY 08.

7. Factors cont’d. Fund Balance cont’d. - Due to the slowed economy and the uncertainty of revenue generation coupled with increasing operating costs in FY 09 and subsequent years, it is imperative that only a minimal amount of fund balance be appropriated to balance the budget in the event we must rely on fund balance to help meet unanticipated revenue shortfalls.

8. Factors cont’d Fund Balance cont’d -There are several jurisdictions in NC that are laying off employees because revenue projections have fallen short and will not cover expenses through the end of the fiscal year. Apparently, they did not have sufficient Undesignated Fund Balance to help cover the shortfalls. -In spite of being designated as economically distressed, Warren County’s governmental finances have always been fiscally sound. It is my recommendation that we begin immediately to reverse the trend of relying on Fund Balance to fund expenses the property tax was designed to fund.

9. RECOMMENDED BUDGET A General Fund Budget of $27,269,959 with a proposed Tax Rate of $.94/100 valuation. This recommended budget is.35% less than the current year’s revised budget of $27,364,479. The tax rate is based upon an estimated assessed valuation of taxable property of $1,428,417,105 and an estimated collection rate of 94%. The assessed valuation of taxable property increased by only $54,935,527 over last year’s valuation. A penny on the tax rate equals $134,271 (last year’s one cent equivalent was $129,794). The amount of undesignated fund balance applied to the General Fund is $2,000,000 representing a decrease of 43% of the current year’s $3,500,101 fund balance appropriation.

10. TAX BASE HIGHLIGHTS EstimatedCollectionAd Valorem Year Tax Base Rate Taxes 2008-09$1,428,417,105 94%$13,497,674 2007-08$1,373,481,578 94.5%$11,832,704 2006-07$1,338,403,806 94.5%$11,247,336 NOTE: Annual percentage of change in the tax base is approximately 3% annually. However, revaluation is scheduled to take effect 1/1/09 that will bring our real property valuations back to 100% of market value.

11. REVENUE COMPARISON REVENUES FY 07-08 (Revised) FY 08-09 (Requested) % Change Ad Valorem Taxes11,832,70413,497,674+14% Sales Taxes3,115,2872,911,000-7% Restricted/Unrestricted (Grants)4,919,0024,933,258+.29% Fund Balance Appropriated Other Revenue TOTAL ALL REVENUES 3,500,181 3,997,305 27,364,479 2,000,000 3,928,027 27,269,959 -43% -1.7% -.35%

12. REVENUES BY CATEGORY FY 09 RECOMMENDED CATEGORY$ AMOUNT% Ad Valorem Taxes13,497,67449% Sales Taxes2,911,00011% Restricted/Unrestricted Grants4,933,25818% Fund Balance2,000,0007% Other3,928,02714% TOTAL$27,269,959 100

13. EXPENDITURE COMPARISON 07-08 (Revised) 08-09 (Requested) Human Services –DSS –Health/Home Health –Mental Health 7,050,480 2,994,223 56,399 6,597,406 3,100,483 59,561 Totals 10,101,1029,757,450 Public Safety –Sheriff –Central Communications –Detention –Emergency Medical Services –Emergency Services –Fire/Rescue 1,859,159 557,139 1,091,248 1,374,286 200,432 259,200 1,941,622 555,902 1,132,747 1,158,097 508,098 270,700 Totals 5,341,4605,567,166

14. EXPENDITURE COMPARISON (CONT’D) 07-08 (Revised) 08-09 (Requested) Education –Warren County Schools –Vance Granville Community College –SEMAA 3,176,935 152,380 160,073 3,440,517 180,112 167,182 Totals 3,489,3883,787,811 Other –Debt Service –Insurance/Fringes –Transfers to Other Funds –Contingency –All Other Expenditures 1,839,088 336,757 700,000 278,441 5,278,243 2,063,453 353,996 71,224 140,780 5,528,079 Totals 8,432,5298,157,532 TOTAL ALL EXPENDITURES 27,364,47927,269,959

15. EXPENDITURES BY CATEGORY FY 09 RECOMMENDED CATEGORY$ AMOUNT% Human Services9,757,45036% Public Safety5,567,16620% Education3,787,81114% Other8,157,53230% TOTAL$27,269,959100%

16. PROPOSED NEW EXPENDITURES NEW VEHICLES -4 replacement vehicles in Sheriff’s Dept. -1 new vehicle in DSS -1 new vehicle & 2 used vehicles in Buildings & Grounds Dept. NEW POSITIONS -Librarian I, Library Assistant I, & Library Aide in Library (Effective 1/1/09) 2 Library Pages (Effective 7/1/08) -Merge 2 P/T Computer Lab Assistants to Library Assistant I Position (Effective 7/1/08 at No Additional Cost) -50% to 100% Recreation Coordinator (Effective 7/1/08) -Administrative Assistant II (50% HR and 50% Solid Waste, Effective 7/1/08) -50% to 100% Administrative Assistant I in Buildings & Grounds (Effective 7/1/08) -50% Kennel Attendant in Animal Shelter (Effective 7/1/08) -Temporary Revaluation Clerk in Tax Administration (Revaluation Fund will fund this 18 month Position)

17. PROPOSED NEW EXPENDITURES (CONT’D.) New Positions cont’d. -Physician Extender, 2 Public Health Nurse II, and Processing Assistant III in Health Dept. Wellness & Home Health Programs (Effective 1/1/09) -50% to 100% Maintenance Worker from Sheriff Dept. to Detention Center (Effective 7/1/08) -Deputy Sheriff - Courthouse Square (Effective 1/1/09)

18. PROPOSED NEW EXPENDITURES (CONT’D.) -Fire Radio System Repairs - $300,000 plus Installment Purchase Payments of $40,762 for a total of $340,762 (Emergency Services) -Renovations to Mental Health Building to House County Administration & Finance Offices - $85,000 (Building & Grounds Department) -Renovations to Old Library to House Tax Administration - $93,000 (Buildings & Grounds Department) -Sewer System Repairs at Detention Center -$25,000 (Buildings & Grounds Department) -Court Facilities Annual Telephone System Cost - $12,613 -EMS Capital Equipment - $40,150 -2% COLA for County Employees Effective 1/1/09 - $102,780 - New Debt Service: Library Principal & Interest - $252,109 Old Library & Mental Health Building Renovation Principal & Interest - $21,804 Halifax EMC (Wise Project) - $15,161 (6 months)

19. Enterprise Funds Summary Solid Waste Fund This budget reflects moderate increases from the current year due to increased costs of fuel and related costs associated with solid waste hauling and disposal. There are no vehicle or major capital equipment purchases scheduled for FY 09. We are recommending the household fee remain at the current level of $105/household. There is no reserve anticipated in the Solid Waste Fund for FY 09.

20. Enterprise Funds Summary cont’d Water and Sewer District Funds The cost of water purchased from the Regional Water System increased by 5% for FY 09 following a 14% increase in FY 08. As a result of these increases the flat rate for water customers has been increased by $1.00 for FY 09. The water/sewer rate structure implemented in FY 07 has proven to be effective in raising sufficient revenues to meet the needs of the water district funds.

21. Enterprise Funds Summary cont’d. Water and Sewer District Funds cont’d. New Positions - 1 Utility Service Technician to help accommodate the additional 1200+ customers to be added in the District III, Phase II Water Project -Reclassify Utility Office Coordinator from Grade 19 to Grade 21 to reflect additional job duties and responsibilities associated with supervising all office personnel, coordinating and assisting with project funding and oversight in a growing Public Utilities Department

22. CLOSING This proposed budget continues the forward momentum of Warren County in several areas, namely: Capital Projects/Recreation Library/Community Meeting Room will be completed and operational in FY 09 Recreation Complex - Phases I & II (fully operational) Funding for 1 Satellite Park in FY 09 Funding for Renovation of the Old Library and Mental Health Building to house County Administration and Tax Administration One EMS Satellite Facility to be constructed with funds appropriated in FY 08 Economic Development Funding for Water/Sewer Infrastructure at the Wise I-85 Interchange Water/Sewer District III, Phase II to serve the Northeastern and a portion of the Southeastern areas of the county is under construction

23. CLOSING cont’d. Communications Funding for Repairs and Upgrades to the Fire Radio System to improve emergency communications Effective & Efficient County Government It is recommended that employee travel be restricted to essential travel for maintenance of certifications, licenses, and mandatory training sessions. Where possible, one employee should be designated to represent the department at informational sessions. Most departmental travel lines have been reduced to FY 07 spending levels or below. Departmental office supply lines have also been reduced to encourage recycling and conservation. We are in the process of reviewing all heating/cooling systems to ensure maximum fuel efficiency in all county-owned buildings. The new vehicle gas purchasing system through Wilco Hess/Trade Mart is in place for the county’s fleet. It is anticipated the County will realize greater fuel efficiencies through this program.

24. CLOSING cont’d Many thanks to our County Finance Director and the Finance Office Staff, Manager’s Office Staff, HR Manager, Facilities & Capital Equipment Committee, IT Committee, Fleet Management Committee, all County Department Heads and Staff for the input and assistance rendered during the preparation of this proposed budget. Respectfully submitted, Linda T. Worth, County Manager