AG 2012 12 17 - Laserfiche WebLink

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Long -term financial planning The County's operating budget (which is comprised of the General Fund, Cabarrus Arena and Events Center Fund, Landfill Operations Fund, 911 Emergency Telephone Fund, Health Insurance Fund and Fire District Fund) for the fiscal year ending June 30, 2013 totals $211,408,859 with a tax rate of $0.70 per $100 of assessed value, based on a total valuation of $18,400,470,359. The valuation decreased 12% from the prior year due to the reduction in property values caused by the recession. As part of the annual budget development process, the County re- examines and updates the Capital Improvements Plan (CIP). The CIP is a five -year plan which projects capital needs and expenditures. It details estimated costs, project descriptions and funding sources for capital projects. The CIP generally addresses capital assets with a value greater than $100,000 and a useful life longer than one year. The CIP is readopted annually. The County also develops a Five Year Financial Plan — a forecast of revenues and expenditures for a five year period beginning with the proposed budget for the upcoming fiscal year. The purpose of the Five Year Financial Plan is to ensure that the County's commitments, obligations and anticipated needs are met in a fiscally sound manner. The basis for the forecast is the then - current fiscal year. Forecasts for subsequent years rely on previous year expenditures and revenues as a starting point. Increases and decreases are itemized. The County acknowledges pay -as- you -go financing as a significant capital financing source, but recognizes that debt issuance is sometimes the most appropriate financing structure for a capital project. Current debt obligations as well as planned debt issuance are also factored into the County's long term financial planning. Relevant Financial Policies In accordance with state statutes, appropriated fund balance in any fund will not exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts. The County will maintain an undesignated fund balance that exceeds eight percent (8 %) in accordance with North Carolina Local Government Commission's (LGC) recommendation. For a County our size, a recommended target goal of fifteen percent (15 %) should be maintained. These funds will be used to avoid cash -flow interruptions, generate interest income, eliminate the need for short -term borrowing, assist in maintaining an investment -grade bond rating, and sustain operations during unanticipated emergencies and disasters. In June 14, 2005 ( Revised march 15, 2010), the Board of Commissioners adopted a resolution formalizing the following fiscal management policies to be incorporated into the County's budget document beginning with the 2006 fiscal year: 1. Recurring, operational expenses of the County government will only be funded through recurring revenue sources: 2. The County will maintain an undesignated fund balance equal to 15% of general fund expenditures; and 3. Upon completion of the annual audit of the County finances, any undesignated fund balance above 15% will be transferred to the Capital Reserve Fund, to reduce reliance on debt financing; or to the Self- Funded Hospitalization Fund, or to the Self- funded Liability and Workers Compensation Insurance Fund as required to maintain the integrity of those funds. 4. Notwithstanding the requirements of items 1, 2, and 3 above, fund balance may be appropriated for any use in the general fund to overcome revenue shortfalls related to significant downturns in the economy. Attachment number 1 1 -3 Page 258