Budget Management Steps Underway
At the Board's September 16 meeting, I was asked to be proactive in considering the potential impact of economic conditions on this year's budget, as well as prospects for next year.
I want to take the opportunity to let the Board know the status of this process.
First, let me say that the full extent of potential impacts on the budget - as well as potential impacts on maintaining or advancing progress toward the Board's scorecard goals - may not be completely evident for some time. At least two key factors affect this timing. First, as you know, there is a significant lag in sales tax revenue reporting from the state. Usually, we don't have a clear picture on sales tax revenues until early in the calendar year.
In addition, we won't know until after October 17 what impact may be felt by counties from the Governor's initiative to reduce spending by 2 percent. That's the deadline for state agencies to let the Governor know how they propose to implement this 2 percent reduction. State agencies are being allowed to choose how to find the savings, and if the economy improves by the end of December, there is a possibility the funds could be returned to them.
As it stands now, public education, Medicaid, and student financial aid have been excluded from the reduction plan.
Still, common sense tells us that Mecklenburg residents and others are cutting back on their spending. If this is true, the county's sales tax revenues could suffer. We also may see some impact on revenues from business property taxes and personal property taxes, if business owners and residents delay or avoid purchasing business equipment and/or vehicles, as examples. This is only a short list of potential impacts on revenue.
Following the Board's request in September, I instructed Management & Budget Director Hyong Yi to work with county departments and agencies to identify options for containing spending and the consequences of those options. The traditional approach often includes a hiring freeze, a reduction in travel to training conferences, and similar reductions.
We've already taken such steps in the code enforcement division of LUESA. The decline in building permits -- and therefore building permit fee revenue -- has prompted LUESA to postpone filling of some vacancies in code enforcement. In addition, greater scrutiny is being placed on approval of travel expenditures.
Sometimes, these across-the-board approaches make sense. However, if we experience a significant shortfall in revenue, these approaches may not be sufficient because they often only serve to trim at the margins rather than affecting substantive cost reductions. We also know from experience that this method isn't always the best option because it cuts high-priority resources at the same level as lower priorities.
Already, we are seeing increases in service demand in several areas, especially in health and human services we provide, which is common during times of economic distress. This dynamic requires us to consider the overall impact of cost reductions on the community and the people we serve.
Therefore, we will look at both the traditional methods of cost containment, while also asking departments to prioritize and be innovative in identifying options.
At its meeting last Tuesday, the Board heard from Finance Director Dena Diorio that she is meeting with department and agency directors to revisit priorities and cash flow needs for capital projects. This part of our process is intended to develop recommendations that will either revise or reconfirm the size of the January bond and COPs sale. Given the uncertainties in the financial markets, managing our capital plan and budget may emerge as our top priority.
The bottom line at this point is that while we don't have definitive data, we must prepare for some shortfall in revenue this fiscal year, and likely into next year. Therefore, over the next two weeks, we will finalize our cost containment initiatives and contingencies, once we have more specific information from the state. I anticipate reporting back to the Board on this matter at its October 21 meeting, if not sooner. In addition, the Board's October 14 Public Policy Workshop agenda will include two related items: an update on revaluation; and an update on the County's capital budget. Therefore, attendance by members of the Board is critical.
I want to commend the Board for taking a strong interest in these matters. I also want to thank the Board for allowing senior management and staff do its job in researching and developing options and approaches to manage our resources wisely.
"Quick Buy" Update
By October 31, we expect to make purchase offers on at least 40 homes flooded in recent storms. The expenditure of County funds for the 2008 "Quick Buy" and the eligibility criteria were approved by the Board on September 16. Funding comes from Storm Water Services capital and reserve accounts as well as an undetermined amount of unspent land bonds.
The purpose of the "Quick Buy" program is for the County to acquire damaged and eligible homes and businesses before they are repaired. The Floodplain Acquisition Program's long-term goals are preventing future loss of life and property due to floods and restoring the floodplain to a natural state to benefit the entire community. It is called a "Quick Buy" because the offers to purchase are processed in a matter of weeks. By comparison, it takes more than a year to buy floodprone property when federal or state grant dollars are used.
The County's consultant is in the process of contacting owners of properties that meet the buyout criteria. The next step is meetings with individual homeowners to answer questions about the buyout process. Real estate appraisals will then be conducted on properties. Once the County makes an offer to purchase, the owner has 21 days to accept or decline. The properties targeted for the 2008 "Quick Buy" are all in the Briar Creek Watershed. Most are in the Country Club Heights and Shannonhouse neighborhoods not far from Eastway Drive and The Plaza. Storm Water Services will continue to look at ways to reduce flood losses for at-risk homes and businesses not purchased through the 2008 "Quick Buy."
Since 2000, Storm Water Services Floodplain Acquisition Program has purchased 180 high-risk buildings on 65 floodplain acres. More than 400 families have been moved out of harm's way. Land acquired through the buyouts has been restored to a natural state, which improves water quality, enhances the ecosystem, and leisure opportunities.
Latin American Festival
Mecklenburg County is a Gold Sponsor of the 18th Annual Latin American Festival this Sunday, October 12 at Symphony Park at SouthPark Mall. Most County departments will be represented at this outreach opportunity that offers the potential to reach 20,000 people in a single afternoon.
In October 2007, Mecklenburg County made a public commitment through Crossroads Charlotte to enhance its communications to residents with limited English proficiency. Called "Bridge 2015", this effort led by the County's Public Service & Information Department (PSI) focuses on increasing awareness and access to County services among minority residents. The first phase targets residents who primarily speak Spanish.
In addition to participating in the Festival, other outreach communications initiatives include: broadening the focus of the health-oriented TV show "
Salud y Vida
" to include more general topics about the County; publishing a brochure on County services in Spanish; creating the Spanish language web site -- Ayuda.charmeck.org -- and expanding the use of CharMeck 311, which already serves Spanish language customers.
For more information, please contact Sr. PSI Specialist
- Harry L. Jones, Sr., County Manager