Final Draft -prelim budget 11-14-19BOARD OF COUNTY COMMISSIONERS
Robert C. Jackson, Chair
Gary Stamper, Vice-Chair
Edna J. Fund, Commissioner
County Manager Erik Martin
BUDGET PURPOSE
The operating budget is one of local government’s most important work products. The budget serves a number of functions.
It is a legal document that gives local government officials the authority to incur obligations and pay expenses.
It allocates resources among departments and offices and funds as well as controls spending.
A budget can also be an evaluation tool, comparing commitments made in the previous year's budget with actual accomplishments.
The statutory deadlines for the county budget process culminate with a public hearing and budget adoption in October. However, RCW 36.40.071 allows counties to use an alternative budget
adoption process culminating in December and to adjust the other budget deadlines as needed to meet the later deadline. Most counties use this alternative budget process.
DISCUSSION POINTS
BUDGET TIMELINE
During the 2020 budget season, the Board had 24 meetings over three full days – all open public meetings with budget staff, offices and departments. Meetings with the Elected and Directors
were used to discuss revenue, expenditures for each departments, challenges facing those areas. Offices and Departments were asked to look at non- mandated programs and look for cost
savings.
There were also many other meeting and work sessions between budget staff, Citizens Budget Committee the Treasurer, Assessor and other Department Directors and Elected to review budget
options and requests.
BUDGET CHALLENGES
Unfunded Mandates and limitations on the courts ability to impose fines and fees on those users deemed to be indigent are having a direct impact to the county budget. #unfundedmandates
Indigent Defense increased ~ Attorney fees and case load restrictions. WSAC is working with all 39 counties on unfunded mandates and will be asking the state to increase the amount counties
received to offset this cost.
Inmate Medical Care ~ cost has increased from 400K in 2014 to over 1.2 mill.
Medical insurance premiums ~ WCIF – at the end of 2017 medical was projected to increase significantly for 2018 rates . The County moved to PEBB insurance for the majority of county
employees and went from a composite rate structure to a tiered structure. In order to keep Family rates affordable the BOCC increased the contribution for the employees ( 11 union groups
are currently in negotiations). even with the increase on the employer side an employee with a family will pay nearly $200 for a HD plan and over $450 a month for lower deductible
family plan.
Public disclosure costs ~ The County continues to face increasing cost due to Public disclosure request. We have hired a PDR Manager to coordinate the request, an additional DPA to assist
in the legal aspect and a full time office assistant. Counties all over the State continue to be impacted by these immense request – mainly involving a few citizens.
State retirement ~ county/employee contribution continues to increase and is estimated to increase again in 2020. the County has a several age eligible employees at this time, we expect
there to be a large turnover due to retirement in the next 3-5 years.
Investment interest decreased ~ although rates are increasing slowly the county interest revenue for the General Fund has decreased from almost 2. mill to $600K estimated.
Revenue Limitations~ the County has limited options to increase revenue, the County will work with WSAC and the State over the next year to attempt to lift some restrictions on revenue
and also increase State shared revenue. The Commissioners have testified in front of the Local Government Advisory Council to express concerns over County revenue and increasing cost.
While the focus has been on school funding we hope there will be some changes in the coming years for counties.
WASHINGTON STATE ASSOCIATION OF COUNTIES
STRATEGIC LITIGATION AND COMMUNICATIONS PROGRAM
WSAC has decided to develop a Litigation and Strategic Communication Program. WSAC members saw this action
as a necessary response to the continued neglect by the State of Washington of the various state services that the
state constitution and laws require counties to perform.
FUND TYPES
001-General Fund=Operating fund for the County
Non-restricted revenue like property tax and sales tax
Includes: Admin departments=HR, Risk, Budget and County Admin.
Elected Offices=BOCC, Treasurer, Auditor, Prosecutor, Courts, Clerk, Sheriff, Jail
100-Special Revenue Funds
Hold restricted revenue that is dedicated to a specific use and usually cannot be used for operations in General Fund
Emergency Management, Veterans relief, Social Services, Community Development, Roads, Health and Weed Control
200-Debt Services funds
Funds are transferred from other funds and paid out of these depending on the type of debt
300-Capital Funds
Used to track capital projects such as buildings - REET revenue is mainly dedicated to capital improvements
400-Enterprise Funds
Supported by fees from a business type activity that cannot be used for any other activity - Solid Waste, Airports
500- Internal Service Funds
Charges to other depts./offices for a service provided internally
IT, Fleet, Risk/Insurance, Facilities
COUNTY SERVICES BY FUNCTION
All budget numbers reflect preliminary figures
Examples:
Culture and Recreation – WSU Ext, Law Library, Fair, Parks
Debt Service – 2009, 2012 and 2015 debt service payments, Vader Water loan payments and county leases on copy machines
Natural and Economic Environment – Animal Shelter, Community Development, Flood Control, Distressed Counties (.09 funds), Tourism Funds….
Operating Transfers – operating transfers from the General Fund and other transfers between funds include traffic policing, paths and trails, transfer from capital for debt service
payments….
Social Services – Coroner, Veterans Relief, Social Services, MH Health….
Utilities – Solid Waste, Disposal District and Vader Water
Capital – Roads Construction, county capital projects ( Juvenile, PH/IT BLDG) South County and Packwood Airports, Equipment Replacement
Public Safety- Jail, Juvenile, Sheriff, DEM, 911 Dispatch Services, Radio Services….
Transportation – Roads Administration, Maintenance & GIS, Airport Operations, Fleet Services, Pits and Quarries….
General Government – BOCC, Auditor, Elections, Clerk, Treasurer, Prosecutor and Courts, County Administration, IT Services, Facilities Maintenance, General Liability, Unemployment and
Workers Comp…..
staffing
General Fund
273 FTE
Other Funds
287 FTE
Total 560
REVENUE BY TYPE - ALL FUNDS
Taxes make up approximately 37% of the revenue collected by all funds, charges for services make up the next largest
EXAMPLES OF REVENUE BY TYPE:
Taxes: Property, sales and use, timber excise tax
License and Permit: Marriage licenses, motor vehicle licenses, election fees, planning and bldg.
Intergovernmental: Grants and pass through revenue for specific programs
Charges for Services: Funds paid for services rendered to outside agencies for prisoner care as well as interfund charges for internal Services.
Fines and Forfeitures: Mainly funds collected by District Court and Clerk
Miscellaneous Revenue: Interest on investments, interest on late payments, civil reimbursements
Other Financing Sources: Forest Board Yield revenue
EXPENDITURES BY TYPE - ALL FUNDS
EXAMPLES OF EXPENDITURE BY TYPE:
Salaries: Salary, wages, overtime and extra help (casual)
Benefits: FICA, Health, Industrial Insurance and Retirement
Supplies: Road Supplies, bldg. maintenance supplies, office and operating supplies, small tools and minor equipment
Other Services: Professional Service contracts, Communications, Travel, Advertising, Operating rentals, Insurance, Utilities and repairs and maintenance
Intergovernmental: Payments made to outside agencies reimbursement payments for WSU extension etc… (SAO has eliminated this account for 2019)
Capital: Road Construction projects, County Building Repairs, Capital Planning and finance system
Inter-fund: Payments made to internal service funds. Services include Information Technology, Facilities and Fleet Services
Transfers: Transfers to other funds for Public Health, Emergency Management, Community Development planning services as well as traffic policing from Roads
Debt Service: Bond payments for Historic Courthouse , Jail and loan payments for Vader Water System as well as leases on copy machines
GENERAL FUND OFFICES AND DEPARTMENTS
WACO & WSAC
Human Resources
County Administration
Boundary Review Board
Central Services Admin
Sheriff
Jail
Juvenile
Weed Control
Air Pollution
Animal Shelter
Coroner
Senior Facilities
WSU Extension
Transfers
Board of County Commissioners
Auditor
Auditor - Elections
Assessor
Board of Equalization
Treasurer
Clerk
Superior Court
District Court
Prosecuting Attorney
Self Insurance
Public Defense/Trial Ct Improve
Civil Service
Disability Board
State Examiner
30 Departments and Offices in the General Fund.
REVENUE | GENERAL FUND
Taxes cover 60% of the operating costs. Sales tax has seen a slight increase the last two years, property tax remains capped at 1% plus new construction and any increases in State Assessed
Utilities
EXPENDITURES | GENERAL FUND
Salaries and benefits account for 64% of the General Fund budget
The graph shows the % of costs by type
Total salaries and Benefits combined are 64% of the entire General Fund budget
GENERAL FUND EXPENDITURES BY FUNCTION
W/O TRANSFERS
Law and Justice account for 81% of the General Fund budget
EXAMPLES OF EXPENDITURES BY FUNCTION:
Public Safety: Sheriff, Jail, Juvenile Detention and Civil Service 56%
Law and Justice: Superior Court, District Court, Clerk’s Office, Indigent Defense
Administration: BOCC, Auditor, Treasurer, Assessor, Risk, Central Services Administration, County Admin., Budget Services, Human Resources, & WSU Ext…
Preliminary - Operating transfers from the general fund
Total $2,280,962
Transfers- Prelim 2020
Some of the approved budget changes may increase the transfer amounts to support operations
DEM- county share of emergency management
Law Library- difference between fees and cost of online subscription
SWWF- County costs – grounds maintenance and utilities
Community Development- costs related to planning
Chehalis River Basin- County share of river gauge maintenance
Dispute Resolution - difference between fees and contracts with local organizations
Public Health- Grant match, mandated services costs, code compliance…
Debt Service – bond payments
Solid Waste- Capital
Airports- Operational costs
Radio Services- Sheriff and Jail Radio Replacements – note : will be transferred to the Sheriffs budget for the final.
BUDGET INCREASE REQUESTS
The BOCC sets expenditure limitations on the Departments within the General Fund. requests above the initial limitation are submitted and reviewed during budget meetings in October and
November.
The BOCC and Citizens Budget Committee discuss the requests during budget meetings.
BUDGET INCREASE REQUESTS - CONTINUED
BUDGET INCREASE REQUESTS - CONTINUED
BUDGET INCREASE REQUESTS - CONTINUED
BUDGET INCREASE REQUESTS - CONTINUED
BUDGET INCREASE REQUESTS - CONTINUED
TOTAL REQUESTED $ 1,683,399
Jail medical, prescription and prisoner supplies costs
District Court Probation Officer
Auditor finance system maintenance
Court Commissioner salary increase
Superior Court Indigent Defense Fees
Lewis County Seniors – Nutrition Support
Drug Court program housing and defense costs
Mental Health prescriptions – LC Jail
Increase salary for Juvenile Administration
Prosecutor interpreters, and operations related to increased caseload
Public Health Officer contract
Animal Shelter spay and neutering fees
Commercial vehicle enforcement truck and equipment
The BOCC wrapped up final budget decisions this week and departments are in the process of making final changes. These figures will be adjusted based on those decisions. Final changes
will be reflected in the resolution on December 2nd
In 2019, the adopted budgeted use of fund balance was $3.6 million for the General Fund and $7.3 million for ALL Funds
Estimated year-end is 1.1 million based on 3rd qtr. projections
2020 Estimated Assessed Valuation (AV)
General $9,449,462,590
Roads $6,674,258,434
2020 Estimated Total Revenue
General $ 13,117,544
Roads $ 12,534,342
Veterans Fund $ 188,990
Social Services $ 236,237
Data from Assessor’s Office 11/4/2019
Includes estimated State Utility assessment
Estimates provided by the Assessor on 11/4/2019.
What is the Fund Balance?
Fund balance is what is left over at the end of the year after all revenues have been accounted for and all expenditures have been recorded against the lawful appropriations of the budget
period.
How much should we have?
The Government Finance Officers Association (GFOA) recommends, at a minimum, that general-purpose governments, regardless of size, maintain unrestricted budgetary fund balance in their
general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures.
What is two months for Lewis County?
Average $3 million a month = minimum of $6.0 million.
What is the use of reserves in the 2020 budget?
The County is budgeting in the preliminary to use an estimated $1.7 million in reserves to balance the budget.
Leaving an estimated ending fund balance for 2020 around $7.7 million.
It is necessary to note that the actual use of reserves will oftentimes be less than the budgeted amount. Vacant positions and unanticipated revenue will have a direct impact on the
use of reserves.
The County will continue to evaluate spending and revenue on monthly basis to ensure year-end reserves are adequate.
GENERAL FUND- FUND BALANCE
FUND BALANCE - CONTINUED
What is the plan if revenues comes in short next year, what programs will be reduced?
The BOCC will continue to review all programs to find efficiencies and look at how Lewis County can do business differently to reduce the cost of providing government services. Budget
decisions will be based on feedback provided by each Elected Official and Director along with input from the citizens of Lewis County and the Citizen Budget Committee.
What efforts has the County made to reduce the impact to General Fund reserves?
Significant reduction in staffing in 2009
Transition of Senior Services in 2018
Moved to PEBB employee medical in 2018 (significantly increased WCIF rates)
Decentralized Fiscal Services reducing Administrator position
Amortize annual leave payouts before rehiring
Deferred building maintenance
Reviewed grants and other funding opportunities
Shared WSU Extension Director with Cowlitz County
What have been the most significant impacts on General Fund reserves?
Inmate medical costs
Indigent defense costs
Labor agreements
Continued restrictions on the ability to collect fines and fees in the courts
Employee medical costs
State retirement increases
Public disclosure management costs
General Liability insurance increases
Reduced timber revenue
Reduced investment interest income
Advocacy
Commissioners and county staff are actively educating federal and state elected officials as well as staff regarding unfunded mandates and barriers to timber harvesting.
• Indigent Defense Cost $1.5 million -1.8 Million depending on cases
• Inmate Medical Care over $1.2 mill just in contract medical services (not including emergency visits)
• Employee Medical Insurance Premium Increases $2.3 mill since 2008-
• Public Disclosure Cost over $300K does not include IT and individual offices and departments time in filling requests.
• Continued Retirement Increase – Contribution rates for WA State Retirement System PERS 2 & 3 continue to increase from 8.31% in 2008 to 12.83% in , (2.1 mill to 3.8 mill)
• Investment Interest – loss of millions over the last several years.
• Revenue Limitations- property tax limitations.- 1% or IPD- minimum increases just salaries and benefits are 2-3%