May 14, 2004
Board of Commissioners
Cleveland County
North Carolina
Board Members:
North Carolina General Statute 159-11(b) requires the County Manager to submit a budget, with a budget message, to the Governing Board no later than June 1. General Statute 159-12 requires the Manager, as the Budget Officer, to file a copy in the office of the Clerk to the Board, where it shall remain available for public inspection until the Budget Ordinance is adopted. General Statute 159-13 requires that no earlier than ten days after the day the budget is presented to the Board, and no later than July 1, the Board shall adopt a Budget Ordinance making appropriations and levying taxes for the budget year in such sums as the Board may consider sufficient and proper, whether greater or less than the sums recommended in the budget.
Tax Base
The projected tax base for fiscal year 2004/2005 is $5,650,000,000.00. This represents an increase of $535,000,000.00 over the $5,115,000,000.00 used in 2003. The 10.46% increase in the value is due to new growth and a property revaluation in Cleveland County.
Revenue Neutral
The North Carolina General Assembly passed legislation in 2003 requiring the County Manager to calculate a revenue neutral tax rate. The General Assembly also identified the steps that must be taken in order to identify that rate. That rate is calculated as follows:
- Determine a rate of tax on the new tax base that would produce revenues equal to those produced for the current fiscal year.
- Increase "the rate by a growth factor equal to the average annual percentage increase in the tax base due to improvements since the last general appraisal."
- Further adjust the rate to account for annexations, deannexations, etc.
The results of this calculation for Cleveland County amounts to a rate of somewhere between 57.14¢ and 57.5¢ dependant on the final outcome of the outstanding appeals, and any reduction in business personal property. This difference between 57.14¢ and 57.5¢ amounts to $198,400.00 in actual money. The actual value of property in Cleveland will not actually be known until the Department of Revenue provides the value they are responsible for certifying in September of this year. A rounding up to 58¢ would enable us to meet some capital needs like the 800 MHz communication system.
State Budget
The State revenue picture is not as bleak as it has been for the past two fiscal years. Information shared at the regional Commissioners meeting indicates the State had an operating surplus at that moment in time. The actual fiscal picture for the State will be more accurate once they have processed all of the taxes due on April 15, 2004.
Governor Easley has proposed taking up to $60 million of ADM Public School Capital money from counties. This effort, if successful, would impact Cleveland County by approximately $866,000.00. This money is now used to retire debt of the consolidated school district.
Salaries and Benefits
The current budget workpapers include a 2% across the board cost of living increase for county employees. In addition, the salary steps will be increased from nine steps to ten along with an upgrade of all salary ranges, which will result in a 4.8% increase in the initial step of a pay grade. Also included in the budget are the step increases for those employees who are below step 4 of their pay grade. Those employees who are step 4 or higher will be eligible for a merit increase. One out of every four employees at or above step 4 will be eligible for either a 1/2 step increase of 2.4%, or a full step increase of 4.8% based on the Department Head's discretion. The merit increases will be available after the performance appraisal is completed, and will be reflected on the January 15, 2005 payroll check.
The health care costs are projected to increase by approximately 7% or $19.00/employee per month. This increase is projected to increase our costs by approximately $159,600.00.
Commissioner Grants
New requests reflected in the budget from the City of Kings Mountain are as follows:
| Kings Mountain Historical Museum | $25,000.00 | |
| Kings Mountain Senior Center | 25,000.00 | |
| Kings Mountain Recreation | 50,000.00 | |
| Total | $100,000.00 |
Other new requests are as follows:
| Uptown Shelby Association | 14,000.00 |
This budget does not include any of these new requests.
Schools
The population of the consolidated school system changed as follows:
| ADM 2003/2004 | Projected ADM 2004/2005 | Variance | |
|---|---|---|---|
| County Schools | 17,235 | 17,609 | 374 |
Cleveland County subsidizes the special tax levied for the consolidated school district by $557.00/student. The increased cost associated with the increase in students amounts to $208,318.00 ($557.00 x 374).
The revenue-neutral tax calculation for the schools amounts to approximately 14.744¢. This rate would create $141,317.00 additional dollars. A rate rounded to an even 15¢ would create $285,957.00 new dollars and may be needed if the Governor diverts these local dollars to balance the State budget.
Health Department
The proposed budget allocates an additional $98,115.00 or 3.26% of county dollars to the operation of the Health Department. There was a reduction in force that eliminated a total of six positions, two in Child Health and four in Maternal Health.
An additional $328,550.00 is allocated to the Health Department Wellness Fund. This fund will enable employees and their dependents to benefit from reduced medication costs and lower copayments for doctor's visits. The funding for this will be through charges to our self-insured medical plan.
Social Services
Funding for Social Services is increased by $558,526.00 with the majority of this increase due to the local cost for Medicaid. There are four new positions, including a Staff Attorney for Child Support which will ultimately result in a net savings for the department. In addition, there are three Processing Assistant positions. The county share for these positions amounts to approximately 38%.
Sheriff's Department
The Sheriff originally requested five new positions, four deputies and a maintenance position for the Jail. This budget provides funds for two new deputies. These two positions will enable the Sheriff to increase the workforce in the Narcotics Division. The Sheriff will use forfeiture monies to purchase four vehicles that were previously purchased with County funds. An existing Maintenance position will be transferred from the Maintenance Department to Detention. Total funding for the Sheriff's Department and Detention will increase by $232,345.00.
Cleveland Community College
Funding for the Community College is increasing by $29,978.00 or 3%. In addition, there is a $50,000.00 appropriation in the capital account.
Emergency Medical Services
A total of six new positions were requested and there was one Billings Specialist II position to be eliminated. The elimination of one position was due to a proposal to utilize a third party for billing. This arrangement should result in increased collections. The six new positions requested were to add an additional crew and realize some reduction in part-time salaries. This arrangement will be cost prohibitive and none of the new requests are included in this budget.
County Fire Service District
A total of nine volunteer fire departments are funded by the three-cent levy included in this budget. This rate was not reduced because of the need to provide these organizations with capital and operating monies that are sufficient to meet their needs. David Dear worked with these organizations and ultimately ended up with the formula reflected in this budget.
General Fund
The total general fund budget reflects an increase of $1,836,373.00, or 3.57%. If you make the following adjustments to this increase, then the adjusted total is as follows:
| General Fund Budget Increase | $1,836,373.00 | |
|---|---|---|
| State forfeited property (Sheriff) | ( 93,625.00) | |
| Governors Crime Commission Grant (Sheriff) | (100,000.00) | |
| Capital Projects (800 MHz tower) | (200,000.00) | |
| Medicaid | (542,715.00) | |
| Adjusted Total | $ 900,033.00 | |
The percentage change between the budget adopted July 1, 2003 would then amount to 1.75% or an increase after adjustments of $900,033.00. The difference between the General Fund Budget increase of $1,836,373.00 and the adjusted total of $900,033.00 amounts to $936,340.00. This difference was used to fund the following items:
| COLA (2%) and Fringes | $525,102.00 | |
| Health Insurance | 148,200.00 | |
| Schools ADM Increase | 208,318.00 | |
| Property Liability Insurance | 42,000.00 | |
| Total | $923,620.00 |
Tax Rate
The proposed tax rate for the county would be lowered by 4¢ from 62¢ to 58¢, or a 6.45% rate reduction. The total valuation less the growth factor identified in the revenue-neutral calculation results in an increase in value of 8.16%.
The proposed tax rate for the Consolidated School District would be reduced by 1¢ to a proposed rate of 15¢. In addition, the County Fire Service District rate would remain at 3¢.
Budget Summary
The North Carolina County Commissioners Association continues to lobby the State for financial assistance with Medicaid. It is doubtful that we will see any immediate relief because the State's fiscal picture will have to significantly improve before we have any hope for assistance.
Respectfully submitted,
R. L. Alexander
County Manager
http://www.ccncgov.com/FinanceD/budget/budget05msg.html
last updated May 14, 2004