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Economic Factors and Next Year's Budgets and Rates Cabarrus County is a part of the Charlotte Metropolitan Statistical Area (MSA), which in the past before the current economic downturn, has proved beneficial in that the County has continued to experience economic growth during national and state economic downturns. As a direct result from current economic conditions, FY 2010 and FY 2011 have created fiscal challenges. Overall, the County has a fiscally strong bottom line, with a balanced diverse economy, and commitment to conservatism and strategic focus in its approach to evaluating both revenue and expenditures for fiscal solutions. The following key economic indicators reflect the current dynamics facing the County. Indicator Cabarrus Count Population, 2009 174,294 Population, 2000 Census 131,063 Population Change 2000 - 2009 32.9% Unemployment, June 2010 10.4% Per Capita Personal Income, 2008 $26,426 Poverty, 2008 1 8.2% Source: U.S. Census Bureau, N.C. Office of State Budget and Management Budget Highlights for the Upcoming Fiscal Year Ending June 30, 2011 Governmental Activities: Ad Valorem tax is the largest single revenue item. It is based on a tax rate of $0.63 per $100 of assessed valuation, the same rate in effect for fiscal year 2010. The total budgeted amount of $120,697,232 represents an decrease of 1.42% from the amended fiscal year 2010 budget attributable to the closure and departure of Phillip Morris, the County's largest taxpayer. Motor vehicle taxes have been budgeted at $7,228,334 or 4.21% decrease from fiscal year 2010. In light of the current economic conditions, values annually continue to decrease as aged vehicles are retained longer. Budgeted sales tax revenues are $26.8 million, a 2.76% decrease below fiscal year 2010 attributable to State Medicaid reform efforts, a change in the state's method of distribution, and the overall economy. As a result of the continued economic slowdown, difficult decisions were made to continue meeting the essential needs of our community. The decline in revenues is offset by savings from the reduction in staff made in FY 2010, reduction in operations including 50% cuts to non - governmental agencies, delay of capital improvement projects, retirement of debt service, and one -time contributions to other funds. In accordance with the existing Cabarrus County Personnel Management Policy, wages increased by 2.5% based on a rounding of the Consumer Price Index (CPI) as published for December 2009. The Personnel Management Policy also provides merit pay raises based on performance. Due to the current economic conditions, the adopted budget departed from the policy and recommended the suspension of merit adjustments for fiscal year 2011. Consistent with the personnel management policy, the adopted budget continues to make 401(k) contributions (equal to 5% of salary) for employees vested in the Local Government Employees' Retirement System. The Local Government Employees' Retirement System approved an increase to the annual local government employer rate, the first in twenty -seven year, effective July 1, 2010. The County's contribution rate increased by 1.55% from 4.80% of payroll for general employees to 6.35 %. For law enforcement officers the contribution rate increased from 5.27% to 6.82 %. Undistributed losses from the affects of the economy contributed to the increase. Additionally, to maintain fiscal soundness, future rate increases are likely to occur over the next five years to offset losses. Public Safety spending funds services responsible for the safety and security of the public. Included in the Public Safety service area are the County Sheriff, Jail, Animal Control, Courts, Construction Standards, Emergency Management, Emergency Medical Services, and 911 Emergency Telephone System Fund. Seventy -seven (77) new Detention Officers are funded for the expansion of the Jail Housing Unit slated to open the summer of 2011. 23 G -2 Page 509