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April 17, 2009

Impact of Flat CMS Funding

One question that has arisen recently is what would be the impact on Mecklenburg County if Charlotte-Mecklenburg Schools (CMS) receives the same level of funding in FY2010 as budgeted for the current fiscal year. One way to answer this question is to identify the additional reductions in County services that would need to occur to eliminate the $41 million gap that remains after the $38 million reduction in County services already recommended.

Based on the budget reduction scenarios provided by County departments and agencies, the impact would range from significant to severe. While the recommended $38 million cuts in County services would result in reduced levels of services, closing the remaining gap would require eliminating many existing services, including several core functions within the high-priority area identified by the Board. Some examples include:

  • Cutting the equivalent of 20 full-time school health nurses
  • Eliminating all County funding for substance abuse prevention services serving more than 2,750 residents
  • Eliminating substance abuse rehabilitation, and education/literacy services in the jails
  • Reducing permanency planning in DSS for foster children
  • Cutting funding to EMS/MEDIC operations
  • Cutting general assistance funding for Crisis Assistance Ministries
  • Cutting in-home aide services for senior clients of DSS
  • Cutting operating hours by two days a week at 20 recreation centers and six school recreation sites
  • Cutting most library operating hours by 30%

There also would be significant additional cuts to the County’s business imperatives, such as eliminating funding of the fleet reserve (vehicle replacement) and cutting capital reserve (building and systems repairs) and technology reserve (IT infrastructure) by 75%. County employees who retain their jobs also would experience additional major cuts in pay of up to 15%. Also, an additional 144 jobs would be eliminated, bringing the total job loss to 400, including 164 filled positions.

Some of these service reductions and eliminations would be mitigated somewhat by cuts in other areas of the budget, such as Central Piedmont Community College, WTVI and outside agencies. However, even a 20% reduction in funding for all these areas combined would generate less than $7 million in savings. Therefore, the remaining impact on County services, our customers and our employees would continue to range from significant to severe.

Recognizing the challenging decisions the Board will face in adopting a budget, the County Manager’s Recommended Budget will include details about these and other choices and consequences.


Personnel Update

General Manager Janice Allen Jackson has resigned from her position with Mecklenburg County, effective May 5, 2009, for personal reasons.

General Manager Michelle Lancaster has been assigned to oversee the Community Health and Safety Focus Area. Michelle also will continue to lead the County’s criminal justice accountability function. To accommodate this new assignment, some of Michelle’s current administrative duties will be redistributed to other members of the Manager’s Office.

Please join me in thanking Janice for her service to this community and our organization.

 

DSS Fiscal Audit Update

As you may recall from a March 31, 2009 email and news release, DSS Director Mary Wilson asked the County Finance Department to oversee a thorough audit of the fiscal management processes of DSS. The Finance Department secured the services of our outside audit firm, Cherry, Bakaert & Holland, L.L.P. to conduct this audit.

Originally, it was projected that Cherry, Bakaert & Holland, L.L.P. would perform 250 hours of audit work over the next few months for approximately $50,000. However, as this process evolved, the anticipated work hours and total scope of this job has been expanded. As a result, the scope of work has been increased by 90 hours of audit work to complete the testing of transactions and disbursement report. This adds $25,000 to the total cost of the audit, which will be funded from the current DSS budget.

For additional information: 
contact Finance Director Dena Diorio email or 704-336-2228.


Process for Board Questions on Budget

In previous years, staff has used a Q&A process to respond to questions Board members have raised regarding the County Manager’s Recommended Budget. Since we have begun providing preliminary budget recommendations for next year’s budget, we also are starting the Q&A process now.

The Q&A process is a simple and effective way to ensure all Board members receive the same information regarding the recommended budget. The process works this way:

  1. Board members provide questions to Management & Budget Director Hyong Yi, preferably in writing (email is appreciated).
  2. Staff will develop a response and include the question and answer in a running Q&A document that will be provided to the Board as questions are answered.

We will use the Q&A process between now and when the Board approves the budget. It is important to note that different questions require varying levels of research by staff. Therefore, some response will take longer than others to generate.


Inquiry on Planning Conference Costs

Board members may be asked by a local news reporter about the cost of the Board’s strategic planning conference held at The Lodge at the Ballantyne Resort. At question is the $9,598 the County paid for the food and food service for 28 people (Board, staff and facilitators) during the two-day activities.

Aside from the cost of the planning and facilitation services provided by The Lee Institute ($5,000), this is only cost the County incurred for conference. Board members will recall that the Resort ownership offered free accommodations. However, we decided to pay the cost of the food and food services as a fair compromise in light of possible perceptions that there might be strings attached to paying nothing for the use of the facility and its services (facility rental and lodging costs were waived by the Resort).

I have been asked by the reporter to comment on the costs. I intend to communicate that I believe this is a reasonable cost of doing business. Furthermore, I believe the $9,598 investment was well worth the results achieved at the conference, which include:

  • A new Board acclimating to existing County policies and services
  • Board members developing rapport among themselves and among the Manager’s Office staff
  • The Board establishing strategic priorities
  • The Board deferring a bond sale that avoided $18 million in added debt service costs

We certainly accept the role of the news media providing scrutiny of publicly funded activities. We also expect this role be carried out with responsibility, including reasonable judgment and analysis about the relative relevance of the matter and in full context.

-- Harry L. Jones, Sr., County Manager



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