FY 2001-02 Budget Documents
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FY01-02 BUDGET CONCERNS
REVENUES
Sales Tax $1.4 million
Based on receipts for the first quarter of the fiscal year and current economic conditions,
It is projected that Sales Tax will be $1.4 million under the amount budgeted for FY01-
02. 1nformation on the County's sales tax receipts for the October-December 2001
quarter will be received from the State within the next two weeks. The Board of County
Commissioners will be informed of any change in this projection.
Interest Income $1 million
Due to the lower-than-anticipated interest rates, it is projected that interest income will be
$1 million less than the amount budgeted for FY01-02.
State Reimbursements $1.4 million
On February 5, 2002, Governor Easley announced that he would hold county
reimbursements to help the State budget shortfall. The impact on New Hanover County
is $1.4 million budgeted in the General Fund that will not be received. This action
coming so late in the fiscal year has made an already grave budget situation more critical.
EXPENDITURES
Medicaid $400,000
The State has estimated that the FY01-02 Medicaid expenditure for New Hanover County
will exceed the amount budgeted by $400,000. To date, New Hanover County Medicaid
expenditures are within budget. In addition to funding $7.8 million in Medicaid expenses,
the County also funds $1.1 million in other entitlement programs.
O~ertime Expenditures $700,000
The FY01-02 budget was adopted with reduced budgets for overtime. Departments have
made attempts to eliminate overtime whenever possible. Even with these actions, it is
projected that the amount required for overtime County-wide will exceed the amount
budgeted by $700,000. Efforts continue to eliminate overtime, and this amount may be
reduced as we continue through the fiscal year
Jail Health Expenditures $158,000
Current projections are that the expenditures for jail health care will exceed the amount
budgeted by $158,000. Expenditures vary depending on the number ot'inmates requiring
care and the cost of this care. The estimate may be adjusted.
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POSSIBLE SOLUTIONS TO FY01-02 BUDGET SHORTFALL
Unexpended Salaries $1,248,542
Since the beginning of the fiscal year, all vacant positions have been reviewed for
possible elimination. A number of positions have been frozen and the filling of positions
delayed. To date, 40 positions have been eliminated. Due to these actions, it is
anticipated that at the end of the fiscal year there will be a balance unexpended of
$1,248,542 in the salary and benefit accounts (County-wide). This amount is not greater
due to the fact that the budget was adopted with salary and benefits under-funded by $1.2
million in anticipation that not all positions would be filled for the entire fiscal year.
Reduce Payments to Non-County Agencies $200,000
In the FY01-02 funding notification, non-County agencies were warned that the funding
might be reduced if an expenditure reduction was required. The savings is based on
reducing the remaining payment to non-County agencies by 50 percent (see attached
spreadsheet).
Reduce Airlie Budget $300,000
Recommendation is to eliminate the contribution of $200,000 to Airlie Foundation for
FY01-02 and reduce the Airlie budget by $100,000.
Reduce Contribution to Schools $2 million
On Monday, Cam and I met with Dr Morris and Mary Hazel Small to explain that due to
current economic conditions the County planned to reduce the contribution to the schools
in the current year by $2 million. The School Board is encouraged to budget $2 million of
the School's fund balance so the expenditure budget is not impacted by the County's
reduction.
Eliminate Balances in Certain Capital Projects $1,309,458
Staff has reviewed all capital project budgets and identified three budgets where balances
could be transferred to the General Fund without a significant impact on current capital
projects. The capital projects are Emergency Operations Center, $205,155; Veterans
Park, $966,000; and Soccer Complex, $138,303
1. Emergency Operations Center - The capital project for the Emergency Operations
Center was established in 1995. The project was not undertaken at that time, since
the estimated cost for the project exceeded the amount budgeted. Currently, the
needs of the Center are being addressed by utilizing Law Enforcement capital
project funds.
2. Veterans Park - The balance in the Veterans Park capital project is funding that
was intended for a completed phase. The actual expenditures were less than the
budgeted funds.
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POSSIBLE SOLUTIONS TO FYOI-02 BUDGET SHORTFALL
CONTINUED
3. Soccer Complex - In January 2000, a capital project was established for a soccer
complex in the Castle Hayne area. Seed money for the project was budgeted, but
the project was not undertaken.
As in any budget year, there are expenditures and revenues over and under the budgeted
amount. The good news is that the County has received $1.2 million from the Federal
Emergency Management Agency (FEMA) for Hurricane Bonnie expenditures. The bad
news is that the Department of Social Services will need to return $400,000 to the State
for prior year adjustments. Museum repairs are expected to exceed the amount budgeted
by $160,000.
FY01-02 PROBLEMS:
Revenue:
Sales Tax
Interest
State Reimbursements
Total
$
$
$
$
1,400,000
1,000,000
1,400,000
3,800,000
Expenditures:
Medicaid
Overtime Salary Accounts
Jail Health
Total
$ 400,000 .
$ 700,000
$ 158,000
$ 1,258,000
$ 5,058,000
TOTAL
. Based on State estimate, NHC to date is within budget.
POSSIBLE SOLUTIONS:
Salaries saved by freezing positions $ 1,248,542
Eliminate some remaining payments to outside agencies $ 200,000
Reduce Airlie Budget:
Contribution to Foundation $ 200,000
Reduce Airlie Budget $ 100,000
Reduce Contribution to Schools and have them $ 2,000,000
budget fund balance
Eliminate Balances in Capital Projects $ 1,309,458
TOTAL $ 5,058,000
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