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May 4, 2009 (Work Session) Page 1357
<br />the closure of Philip Morris ahead of schedule will greatly impact the
<br />County; projections have been reevaluated due to this closure; the budget for
<br />next year is approximately $12 million less than the one approved last June;
<br />tax collections are approximately $2.3 million lower than last year; the
<br />unemployment rate in March was 11.3 percent; unemployment is expected to
<br />continue to increase at least through the remainder of the year; the early
<br />closing of Philip Morris will result in a decline in tax revenue of
<br />approximately $2 million a year sooner than expected; 380 Cabarrus County
<br />residents are employed at Philip Morris; the original five-year plan called
<br />for the school debt issue to be issued in May and again in 2013; there is an
<br />anticipated increase of 6.5 cents on the tax rate in FY 2011 and another 3.75
<br />cents in FY 2012. Mr. Day stated that he cannot recommend tax increases of
<br />that magnitude due to the uncertainty of the economy.
<br />Mr. Day further reviewed the following options: (1) issuing
<br />Certificates of Participation for the school construction in May 2009 as
<br />planned but the principle and interest would be capitalized for as long as
<br />permitted by IRS regulations, this would result in a 2 cent tax increase in
<br />FY 2011 and another 2.5 cents increase in FY 2012; option (2) Certificates of
<br />Participation for school construction would not be issued until May 2012; in
<br />both of these instances there is no additional school debt that is issued for
<br />the remainder of the five-year periods; the scenario that delays the issuance
<br />of debt would require a '-~ cent increase in FY 2011 and that would be the only
<br />tax increase for the five-year period; in both alternatives, the funding for
<br />the debt service is derived from retaining the tax rate during the
<br />revaluation in FY 2013; the original plan did anticipate selling additional
<br />school debt in FY 2013 and using revenues generated from the revaluation to
<br />pay for that; due to the decline in revenue and a decline in population
<br />growth, this plan delays that 2013 debt issuance for an undetermined period
<br />of time; etc. He stated Pam Dubois will review the details of the plan and
<br />answer questions and Brent Weisner will answer questions regarding valuation
<br />numbers. Mr. Day responded to questions from the Board regarding tax rate
<br />increases.
<br />Mr. Day also responded to questions from the Board regarding the two
<br />options presented.
<br />Pam Dubois, Deputy County Manager, presented the following two plans
<br />regarding the proposed FY 2010 Cabarrus County Budget:
<br />Year Financial Plan - A (May 2009
<br />GENERAL FUND Reval
<br />Budgeted Revenues for: 2010 2011 2012 2013 2019
<br />Estimated operating
<br />revenues from previous
<br />fiscal year 198,051,391 199,522,662 199,931,117 211,856,895 229,657,615
<br />Growth due to Revaluation
<br />(118 for Real Property) - - 13,208,252
<br />Annual Growth in Property
<br />Taxes for New
<br />Construction 1,666,895 (2,930,260) 1,795,939 3,387,539 5,160,392
<br />Increase in Property Tdx
<br />(2, 2.5) - 9,039,996 5,130,138 -
<br />Growth/Decrease in
<br />Register of Deeds Fees (302,980) - 50,000 -
<br />Growth in Other Revenues 785,611 750,000 750,000 750,000 750,000
<br />Growth in Building
<br />Inspection Revenues (500,000) - 50,000 -
<br />Growth in Ambulance
<br />Revenues 525,000 150,000 150,000 150,000 150,000
<br />State Hold Harmless
<br />(Medicaid Reform) 1,999,093 1,102,691
<br />Growth/Decrease in Sales
<br />taxes (1$ inc FY 12 to FY
<br />19) (561,995) - 227,927 230,206 232,508
<br />Addition of 1/9 cent sales
<br />tax for education cost - 2,211,689 3,202,519 108,289
<br />Reduction in Taxes -
<br />Article 39 and Article
<br />94 (Medicaid) (5,321,210) (1,306,508) (32,981) (33,311) (33,699)
<br />Total Revenues 199,522,662 199,931,117 211,856,845 229,657,615 235,917,071
<br />Budgeted Expenditures for:
<br />Estimated operating
<br />expenditures from
<br />previous fiscal year 188,666,929 188,276,086 199,023,278 210,725,722 220,258,839
<br />RCCC CuYYent Expense
<br />Funding - 89,925 99,921 99,142 109,099
<br />School Current Expense
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