County Staff recommendations

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The Gross Receipts Tax revenue for fiscal year 2013 and for future years, is projected to be significantly lower than in previous years. Since this is the primary funding source for most general governmental operations and capital projects, some changes must be made in order to move back toward having a balanced budget.
Given this context, Council would expect that the FY 2014 proposed budget would be developed with noticeable changes in all of the following six categories. Changes in each area should be pursued to the extent deemed helpful and practical.
1. Fund balance — use of fund balance is expected when severe revenue fluctuations occur. The following parameters serve as guidelines.
a. Use of up to 100 percent of the fund balance committed for revenue stabilization through the end of FY 2016 is acceptable as long as the projected balance at the end of FY 2017 returns to the policy target level of 5 percent of revenues. This is an extension beyond the current financial policies.
b. Manage all other variables so that the unassigned fund balance is maintained at the policy target level of 20 percent of revenues.
c. Re-evaluate all fund balance levels for potential re-programming and possible re-capture back into the general fund.
2. Expenditures — reductions in general fund expenditures, operating transfers to other funds, and transfers to the CIP Fund must address at a minimum 50 percent of the expected budget imbalance. This should be accomplished by :
a. Increasing operating efficiencies
b. Reducing discretionary items (travel, food, uniforms, etc.).
c. Lowering staff levels and staffing costs (see staffing below).
d. Minimally lowering customer service levels. Because customer satisfaction levels are generally very high, minimally lowering customer service levels is acceptable. This may include reductions of outside service contracts. Reduction of some low use/high cost service hours is also acceptable.
3. Capital projects
a. Defer some capital projects for up to five years.
b. Reduce annual placeholder amounts for roads, parks and IT projects by approximately 10 percent.
c. Finance new facilities with new revenues and new debt
4. Debt
a. Existing general county debt should be refinanced if there is a projected annual operating debt service savings and a projected total net present value savings.
b. New general obligation debt with new property tax revenue for planned CIP projects that are new facilities (not replacement or major maintenance) should be pursued, including the related required voter approval.
5. Revenues — because of the magnitude of the projected revenue reduction, new revenues should be proposed.
A. New tax revenues
i. Property taxes — given the relatively low currently imposed County and Municipal rates, re-implementing the $1.5 million (which was removed in FY 2011) of property tax revenues should be included in the FY 2014 proposed budget.
ii. GRT — because of the high concentration of this one revenue source, no more than 1/4th percent new GRT tax increment should be included in the FY 2014 proposed budget.
b. User fees — all user fees and the user fee policy should be re-evaluated and reasonable increases should be proposed.
6. Staff
a. Eliminate salary increases in FY 2014 proposed budget.
b. Staff levels should be reduced through attrition, while trying to minimize decreases to customer service.
c. Due to anticipated impacts on customer service, avoid a countywide reduction in force if possible.