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* 2011 Budget approved by Board of Commissioners on 2/1/2011 - PowerPoint PPT Presentation


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2011 Budget Overview What has been included/excluded Risks for 2011 Outlook for 2012 Janelle Funk February 2011. * 2011 Budget approved by Board of Commissioners on 2/1/2011. 2011 Budget Assumptions. All organizations asked to reduce 8% compared to 2010 Budget

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2011 Budget Overview What has been included/excludedRisks for 2011Outlook for 2012Janelle FunkFebruary 2011

* 2011 Budget approved by Board of Commissioners on 2/1/2011

2011 budget assumptions
2011 Budget Assumptions
  • All organizations asked to reduce 8% compared to 2010 Budget
  • Perfect Attendance not budgeted – but program still offered (~$300k)
  • Utilization of previous overfunding in defined benefit plan (~$2.0M)
  • Sale of Property ($1.5M)
  • Tax collection rate increased from 94% to 99% in fiscal year, ($1.4M)
  • Use of reserves in many funds, but General Fund significant ($850k)
  • Insurance plan changes made, and EE contributions increased from $1.7M to $2.9M, but 2011 Insurance Plan Budget at moderate risk
  • Positions frozen in 2010 were eliminated in 2011
  • Workers Comp Budget assumes 2011 new claims = 2010 new claims, and significant closure of open cases
  • Admin Operating costs (Utilities, janitorial, property insurance, WC) budgeted within each fund, not department
request for 8 reduction
Request for 8% Reduction
  • Organizations already operating on very lean basis
  • Outside organizations also asked to reduce 8% (library, historical society, etc.)
  • Smaller departments unable to reduce without impacting employee pay
  • Less flexibility for departments supported by fixed contracts
    • The final 2011 Budget for the General Fund is 5.4% < the 2010 Budget.
    • The Fire Fund is 5.9% less.
    • All other funds scrutinized spending, and either made cuts or have reserves to help fund 2011 operations.
perfect attendance
Perfect Attendance
  • In order to balance the 2011 Budget, this program was not budgeted separately.
  • However, the BOC approved the County to continue the program in 2011.
  • The chart below reflects the 2010 cost of the program, and the potential impact on 2011 Budgets – departments should plan ahead to cover this cost.
  • Time period to qualify: 11/28 /10 – 11/26/2011
county contributions to defined benefit plan
County Contributions to Defined Benefit Plan
  • County contributed > minimum contribution in previous years
  • Due to higher contributions in the past, the county has an “overfunding credit” of $3.4M
  • Of 95 counties participating in the ACCG Defined Benefit Plan, only 2 have credits (fortunately we saved in prosperous years!)
  • In order to reduce cash out in 2011, we have elected to utilize $2M of this credit
  • Over the long-term, the County will still be required to fund the plan appropriately
  • There is NO change to employee benefits
  • This option is available for 2011 only
  • If this option was not used, 15-20 furlough days would have been required
sale of blalock property
Sale of Blalock Property
  • The General Fund owns land around the soccer complex
  • The value of this land is ~ $1.5M
  • This land will be sold from the General Fund and purchased for County parks/greenspace
  • This sale aligns with the objectives of SPLOST IV and Parks Bond, and provides cash infusion to General Fund
increasing tax collection rate
Increasing Tax Collection Rate
  • Cherokee County has a strong tax collection rate
  • The county eventually collects ~ 100% of the amount assessed
  • However given the timing of the process –we historically recognize 92-95% of receipts within the current fiscal year
  • In 2011 the budget assumption is to collect 99% of the amount assessed in the same fiscal year
  • Potential to reset due date one month to accelerate collections to achieve this?
    • No – not permitted in 2011. Georgia law requires changes in tax due dates to be made by December 31 of the year preceding the change.
    • Jerry Cooper questions if DOR Commissioner can modify requirement?
    • If not, if we do have a cash crunch, the General Fund could borrow cash to cover the gap (would probably only be for 1 month).
timing of tax collections
Timing of Tax Collections
  • Fiscal Year 1/1/2011 – 12/31/2011
  • Send Tax Bills ~ October
  • Taxes Due 12/20/2011
  • ~92-95% of taxes received by 2/28/2012 – record as 2011 Revenue
  • ~ 4 – 7% received after 2/28/2010 – record as 2012 Revenue
importance of cash general fund cash low points
Importance of Cash – General Fund Cash Low Points
  • Each year, the County’s cash low point has decreased
  • We anticipated hitting a cash low point of $500k in 2010
  • $500k = 2 weeks of General Fund A/P Checks, or ½ week of GF payroll
  • We hit $670k for 3 days between Nov 17 – 19, -$181k when considering the negative cash balance of other funds the General Fund is required to support
  • Since tax bills were sent earlier, we were able to recover our cash position
  • In 2011, we anticipate a cash low point of -$1.4M
use of reserves general fund
Use of Reserves – General Fund

INFLOWS: $56.5M

EXPENSES: $57.3M

SHORTAGE $ 0.8M

Even with department reductions, completing a land sale, reducing the pension contribution, eliminating frozen positions, increasing the tax collection rate assumption, and eliminating the perfect attendance bonus, the General Fund is still required to use its very limited reserve.

what happened to gf revenues
What Happened to GF Revenues?
  • 2010 Budget for Property Taxes was too optimistic. 2011 Tax Budget is even aggressive by assuming 99% collection rate in fiscal year.
  • 2010 Budget for Charges for Services included $4M Budget for tax commissions. Budget should have been closer to $3.6M since directly related to tax collections.
  • 2010 Charges for Services assumed Landfill Use fees would decline, but we have experienced even greater decrease from $2.7M Budgeted in 2010, down to $2.3M budgeted in 2011.
  • 2011 Budget for Fines & Forfeitures set according to 2010 declining trend. Fines are meant to protect community, not generate revenue.
insurance benefit fund
Insurance & Benefit Fund
  • Considerable plan changes
    • adding deductible,
    • slight increase to co-pays,
    • significant increase to EE contributions ($1.7M - $2.9M)
  • 2011 Budget = Minimum Expected Cost Forecast from BCBS (no buffer!)
    • 2010 Actual ~ $9.3M Self insured Expenses
    • 2011 Budget = $9.4M Self insured Expenses
  • 2011 County Contribution Budget ($5.7M) = 2010 Budget ($5.7M)
  • After a few spike months, 2010 Actual costs were > 2010 Budget – but not as significant as feared
    • Total Fund Loss for 2010 ~ $850k to be covered by County
workers comp
Workers Comp
  • 2011 Budget includes:
    • Admin Fee, State Board, Budget for Existing Claims, Plan for New Claims
    • Budget for Old Claims: Steve McClure and Jerry Cooper reviewed each open case and provided estimate for case closure in August 2010
    • Jerry Cooper reviewed budget for claims again in December 2010 to verify reasonableness
    • 82% of the 2010 Cost represents claims before 2010
    • 2011 Budget for new claims = 2010 new claims
    • Worker’s Comp has been budgeted at the FUND LEVEL, not department level
frozen positions eliminated from org structure
Frozen Positions Eliminated from Org Structure
  • 51 FT, 13 PT frozen positions eliminated from Org Structure
  • Wages/Benefits/Tax avoided = $2.4M
  • If positions needed in future years , departments heads can request new positions
admin costs
Admin Costs
  • The following costs were budgeted at the FUND LEVEL:
    • Electricity
    • Water/sewage
    • Natural Gas
    • Janitorial
    • Disposal
    • Workers Compensation
    • Property/liability insurance premiums and claims
  • All departments are asked to monitor and manage these costs the best they can.
  • However, since these costs will be charged to the Fund Level, fund owners are ultimately responsible.
splost v
SPLOST V

2011 Revenues & Spending = $29.3M

Library Books $500k

Emergency Communication Systems $940k

Juvenile Court Renovation $700k

Parks & Recreation

Union Hill - $350k

City Club $750k

Fire Training Center $1.4M

Law Enforcement $1.3M - Training Center $0.9M, -Vehicles $0.4M

Debt Service

$7.8M

Canton Senior Center Expansion $750k

Airport $1M

Roads & Bridges $ 7.4M

2012 outlook what is on the horizon
2012 Outlook – What is on the Horizon?
  • In 2012 the County will not have $1.5M Blalock land to sell
  • The County will also not have the $2M option of reducing contributions to the defined benefit plan
  • In 2011 we budgeted $850k in reserves (shortage of final inflows compared to outflows)
  • These three items will create an automatic $4.4M shortfall we will somehow need to cover in the 2012 Budget
  • 2011 Revenues budgeted aggressively – we hope they will come in as projected, and can be duplicated in 2012
  • 2011 Medical claims budgeted aggressively – we hope our costs will not exceed our funding

Bottom Line: 2012 will be more challenging than 2011