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County Manager Recommends FY04 Budget

 

County Manager Harry Jones' budget calls for $21.9 million in spending cuts, 120 fewer jobs and a tax rate reduction to reflect revaluation.

View all budget options

FY04 Recommended Budget News Release

REMARKS – HARRY JONES – MAY 20, 2003


BOARD OF COUNTY COMMISSIONERS MEETING

INTRODUCTION

As I present my recommend budget to this Board, I'm mindful that I'm also presenting this budget to the residents of Mecklenburg County.  Therefore, I'd like to begin my comments by mentioning what you already know:

  • That the mission of Mecklenburg County government is to serve County residents by helping improve their lives and community, and that the Vision the Board has established for this community is that in 2015 Mecklenburg County will be a community of pride and choice for people to LIVE, WORK, and RECREATE.

This mission and vision is the foundation for everything Mecklenburg County does and therefore the basis for developing the County Manager's Recommended Budget.

Mecklenburg County is a growing and diverse community of more than 700,000 people, and therefore has needs that vary widely.

As the Board is well aware, counties in North Carolina are required to provide certain services, such as buildings for jails, schools and state-operated courts; local match for aid payments such as Medicaid; some funding for school operations; and health and human services.

The fastest growing demands on the county's tax base are debt service and education.  More than half of the FY04 projected county revenues is allocated to these three services.

I believe my job in recommending a budget is to balance the many community needs.  As I mentioned, I've done this by focusing on the Board's vision for this community, and how County funding will have an impact on this vision of what this Board wants Mecklenburg County to become in the year 2015.

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BACKGROUND/PROCESS

Allow me a moment to review the background and process we have followed to get to this point today.

 

 

At your January Strategic Planning Conference, you instructed me to develop four budget option:

  • Current Service: A budget at our current level of service that includes full funding for Charlotte-Mecklenburg Schools and CPCC

  • Rollback 1: A Revenue Neutral budget related to the recent property revaluation…One that excludes consideration of increase revenues from normal growth in the tax base.

  • Rollback 2: A Revenue Neutral budget that includes increased revenue for normal growth in the tax base; and

  • Full Rollback: A Revenue Neutral budget that includes growth but also rolls back the property tax rate equal to the amount of money the County is expected to take in from the half-cent sales tax levied in January 2003

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Budget Goals

In addition to following the Board's direction in providing the budget options I just mentioned, developing the County Manager's Recommended Budget was based on the Managing for Results philosophy that emphasizes:

  • Using the Board's Community Vision and its Community & Corporate Scorecard to identify strategic priorities

  • Funding programs and services that are consistent with strategic priorities and that attain the desired results

  • Identifying the organizational imperatives and/or improvements that must be funded to ensure sufficient capacity to achieve desired results

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Budget Strategy

Based on these key budget goals, the following strategies were used in developing the recommended budget:

  • We used the Board's Community & Corporate Scorecard to identify the County's core services; to prioritize County primary service programs; and to gauge program effectiveness in progressing toward the Board's scorecard goals.

  • We reviewed and evaluated all County programs for effectiveness and efficiency.  It should be noted that Pre-balanced scorecard performance measures were used because program measures tied to the department scorecards are still being developed and implemented.

  • We identified cost savings and other efficiencies through organizational restructuring, consolidation, partnerships, privatization, outsourcing and other means.

  • County departments were directed to assume the cost of funding vacant, frozen positions and additional cost of staff overhead (e.g., increases in health insurance) within their target budgets, while keeping these targets essentially flat from FY03.

  • We addressed County internal infrastructure deficiencies that impact productivity, financial stability, and other organizational capacity imperatives.

  • We made it a priority to invest in employees as our most important resource, particularly reinstating pay-for-performance as part of strategic management of human capital; and

  • We proposed continued investment in eGovernment, using the Internet and other technology to streamline services and organize service delivery to increase customer service value.

In addition to the budget goals and strategies mentioned above, I also must satisfy my statutory responsibilities in providing a recommended budget to the Board.   As a result, in the document that follows, I am providing not only the four budget options requested by the Board but also the County Manager's Recommendation Budget. 

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In making this recommendation, I am mindful of the commitments some of you have made regarding your support for a rollback of the property tax to offset the revenue generated by the half-cent sales tax levied beginning January 2003.  Several weeks ago, I asked you to keep an open mind regarding that option.  Again, tonight, I ask the same consideration.  I do not believe that this option assists the Board or this community in advancing toward the goals and vision you have set.  Please allow me to take a few minutes to explain the rationale used in requesting that the Board strongly consider the recommended budget I am proposing. 

First – The Sales Tax Replaces State Reimbursements: 

The half-cent sales tax option was provided to counties by the N.C. General Assembly to replace reimbursements revenue the state withheld from counties.  Because the amount of state reimbursements ($24.7 million) was eliminated from the FY03 County budget, the revenue from the half-cent sales tax will allow the County revenue to return to the level it was prior to the withholding of the state reimbursements. 

Originally, the General Assembly intended to repeal a half-cent statewide sales tax, effective July 2003 to ensure taxpayers would "break even" on the sales tax cost.  While it appears the General Assembly is reconsidering this repeal, Mecklenburg County should not be held responsible for the actions of the state.  Therefore, rolling back the property tax to offset the revenue of the half-cent sales tax essentially negates the General Assembly's intent to hold counties (and municipalities) harmless for having reimbursements withheld.

Second is the Commitment to Board's Community Vision, M4R and Balanced Scorecard Goals:

The severity of service reductions required to roll back the property tax to offset the half-cent sales tax revenue would prevent meaningful progress toward the Board's community vision and balanced scorecard goals, and in some cases would result in a regression from those goals.  Unless the Board provides direction to the contrary, I am obligated to provide the Board with a recommended budget that allows the County to progress toward the Board's goals for this community. The recommended budget is the minimum budget to allow progress toward our balanced scorecard goals. 

The Third Reason is the Reductions in Service: 

The service reductions required to meet anything less than the recommended budget would be significant.  These reductions are severe because they come on the heels of other considerable reductions over the past two years.  Combined with additional reductions in state and federal funding, most County departments and agencies cannot sustain more significant reductions without simply eliminating entire programs and/or departments themselves.  While these program reductions and eliminations were based on service priorities, they represent services County residents are currently receiving that are unlikely to be provided elsewhere in the community.

Fourth is the Revenue Projection Shortfall: 

Several factors have contributed to a much lower revenue projection than previously anticipated.  However, the greatest single factor is a sour economy.  This sour economy has contributed to a lower than anticipated growth in the County's tax base, minimal growth in sales tax revenue and a decrease in other revenue sources.  As a result, the County has less money to spend on services than previously anticipated. 

Finally – The Affordability of Recommended Budget:

If the Board approves the recommended budget, the typical residential property owner -- someone who owns a house valued at $150,000 -- would pay $46.65 more in annual property tax than if the Board were to approve the Full Rollback budget option.   It is my judgment that this difference is a reasonable and affordable price to maintain the $25 million in services that would otherwise need to be eliminated.  Again, this judgment is based on the funding needed to make progress towards the Board's vision for this community.

I believe these factors warrant a full consideration of the recommended budget as the minimum level of funding for Mecklenburg County in FY04. 

Accordingly, I am strongly recommending that the Board adopt Rollback 2 (revenue neutral + growth) as the choice most suitable in addressing the needs of this growing community and the overall budget goals.  This budget option would require a countywide property tax rate of 76.85 cents per $100 valuation, a decrease of 7.12 cents from the current (FY03) tax rate of 83.97 cents.

Again, this judgment is based on the funding needed to make progress toward the Board's vision for this community.

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Manager's Recommended FY2003-2004 Budget

I'd like to turn now to specific budget figures in the recommended budget.  The County Manager's recommended operating budget total $1,083,150,040, a 2.71 percent increase from the FY03 Amended Budget. 

This budget requires $755,053,545 of net county revenue, approximately $40 million more than the FY03 Amended Budget, a 5.6 percent increase.   Please note that county revenue refers to revenue generated by local sources such as property taxes, undesignated sales taxes, but not fees or charges for service. 

The document provided to the Board provides a breakdown of revenue and appropriations in detail, so I will mention only a few highlights. 

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Revenue

First, let me speak about revenues.

The County's largest source of operating revenue is the property or "ad valorem" tax.  This tax is based on the assessed value of all land and buildings (real property) as well as automobiles, boats, trailers and income – producing tangible personal property.  By State law, the appraised value must equal the full market value of the property.

In January 2003, Mecklenburg County completed a revaluation to reflect market changes in the assessed value of real property.  This revaluation established an estimated assessed valuation of $76.596 billion, not including normal growth in the tax base. 

Growth in the tax base is generally defined as the value of new construction as well as the value of assets added to the tax base since January 2002.  As a result, revenue neutral calculation is based on the valuation of $76.596 billion that does not include growth. 

When growth is included, the total estimated assessed valuation is $80.296 billion, a 14.85 percent increase from FY03 assessed valuation.  This includes $2.5 billion for new construction and $1.2 billion for new assets added, as well as the financial impact of property tax relief to low-income elderly and disabled homeowners. 

The net yield of one cent on the FY04 projected tax base is $7,799,953, based on a collection rate of 97.14 percent

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Sales Tax

For FY04, we are projecting sales tax revenues to be $151.6 million, a 23.55 percent increase from the FY03 estimate of $122.7 million.  This includes an estimated increase of only $3.9 million in previous sales tax sources along with the estimated $25 million increase in FY04 from the half-cent sales tax levied in January 2003. 

The recommended budget and other budget options also would appropriate $9 million in sales tax revenue that is projected to be generated by the new half-cent sales tax in FY03 between January 2003 and June 2003.

A total of $29.3 million in Transit Sales Tax is included in the recommended budget.  In accordance with the Transit Governance Interlocal Agreement, the net proceeds from the County's portion of the tax will be disbursed to the City of Charlotte to fund the operation of CATS public transportation system as defined in NCGS 105-506.

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State and Federal Revenues

Total State and Federal revenues are projected to decrease by $922,714 in FY04, compared with the amount budgeted for FY03, a 6.4 percent decrease.  This decrease will result in Mecklenburg County receiving less in total State and Federal revenues than in any of the last three fiscal years. 

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Interest on Investments

Given the relatively poor market, investment revenue is projected to decrease by 55.2 per cent from FY03 estimated investment revenue, from $11.6 million to $5.2 million.

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Fund Balance

Fund balance for the General Fund is projected at $153.5 million with an undesignated fund balance of  $79 million.  Unlike previous years, the FY04 recommended budget does not include an excess in fund balance beyond the 8% guideline.  Therefore, no funding from fund balance is included in the revenues for any of the FY04 budget options, including the recommended budget.   The two key reasons there is no excess in fund balance is available.  First, the bankruptcy status of U.S. Airways cut property tax collections by more than $4 million.  Second, the County anticipated lapsed salaries as part of the FY03 budget, thereby reducing overall fund balance available for FY04 appropriations.

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Fees and Other Charges

Under the category of fees and other charges, Land Use and Environmental Services Agency is proposing two fee increases. An eight percent Permit Fee increase is requested in Code Enforcement due to the following reasons:

  • Projected reduction of $601,000 in Fees and Charges

  • Permit revenue is off by 9 percent since FY02

  • The development industry anticipates revenue to continue to drop 6 to10 percent in FY04.

  • While construction value permitted has decreased by approximately 5 percent since FY02, the demand for service has not decreased.  Requests for building permits are only off a little, 3 percent, since FY02.

The Building Development Commission unanimously endorsed the fee increase at its March 18 th, 2003 meeting.  They would rather have a fee increase than a reduced level of services.  Code Enforcement has not had a fee increase for anything other than technology since FY01.

The budget also includes a two percent increase in the tipping fees charged to the City of Charlotte and participating Towns.  This will increase the tipping fee from $24.00 per ton to $24.50 per ton.  The increase is designed to offset the automatic CPI adjustment to the contract rate with the BFI Charlotte Motor Speedway Landfill.

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LESD

The Law Enforcement Service District, created by the Board of County Commissioners effective January 1996, is used to finance and provide law enforcement services to the unincorporated areas of the County.   According to the interlocal agreement between the City of Charlotte and Mecklenburg County, the County's share of the net Charlotte-Mecklenburg Police Department (CMPD) budget is based on the overall percentage of the unincorporated area population to the total population served by CMPD.  With a FY 04 Charlotte-Mecklenburg Police Department estimated net budget of $137.4 million; an estimated assessed valuation of $7.7 billion; and, County's share of 9.13 percent, the F04 tax rate increases to 16.79 cents per $100 of assessed valuation from the current year tax rate of 14.5 cents.

Three key factors are contributing to this: a change in population distribution and area served as a result of the Town of Mint Hill no longer being in the CMPD service area; a reduction in the population and area served due to City of Charlotte annexation; and the increase in the CMPD estimated FY04 budget.  Because fewer people are paying for increased costs, the tax rate increase is required to pay for the contracted service.

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One-time Revenue Source

It is important to note that all budget options include significant one-time revenue sources, as follows:

  • $9 million in sales tax revenue I already mentioned that will be collected from half-cent sales tax in FY03 (January – June 2003); and

  • $4.3 million from the sale of the incinerator and the remainder of funds that had been identified for right-of-way acquisition.

As we look ahead to FY2005, these particular funds will not continue to be available as a revenue source.  However, in FY04 these funds were applied to expenditures that are not necessarily annual costs, such as the unexpected additional cost for the CJIS project in FY04, delayed replacement of vehicles and PCs, technology improvements as well as capital maintenance projects for County buildings. 

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Appropriations

Now I will turn to appropriations.  In the budget document, we have presented appropriations as well as service reductions in two views.  One view is by the three major service categories:  Debt Service; Education Services; and County Services.  The other view is by the Board's four Focus Areas.  These two views are provided to allow transparency in spending and reduction choices and the impact of both. 

For purposes of this presentation, I will focus on expenditures by the three major service categories, beginning with debt service.

Debt Service

While total debt services for FY04 is projected at $168,530,231, a $14.3 million increase from FY03, for purposes of budgeting, this service category includes all debt service excluding CMS and CPCC.  I'll mention these costs as part of Education Services in a moment. 

Therefore, Debt Service for FY04 is projected at $71,321,743, an increase of $7,718,403 (12.1 percent) over FY03.  Revenues such as sales tax, interest earned on investments, and ABC profits are used to offset debt service expenditures.  The remaining cost of debt service, approximately $67.5 million, is paid for by property tax revenue.

Total cost for Education Services in the recommended budget is $385,359,664.  This service category includes Charlotte-Mecklenburg Schools (CMS) and Central Piedmont Community College (CPCC) operations and debt service. 

CMS and CPCC debt service will be $76.98 million, an increase of $8.15 million from FY03, of which nearly $7 million ($6.97 million) is for CMS debt.  Approximately $67.2 million of the $76.98 million total is for CMS.

A total of $286,112,176 is for CMS and CPCC operating funding, a $5.5 million increase over the FY03 amended budget.  This represents 37.89 percent of the net county funding in the recommended budget.  CMS operating funding would be $269,988,951, a $5 million increase, and CPCC funding would be $16,123,225, a $500,000 increase.   When considering both operational and debt service funding, the per pupil funding for CMS would be $2,990, an increase from $2,968 in FY03; the per pupil increase for CPCC would be from $325 to $329.

As you know, the Board of Education has requested approximately a $15 million increase to meet growth needs and to address equity.  The CMS budget request also identifies $10 million in cost savings within the current CMS budget.  When combined with this $10 million in savings, my recommended increase of $5 million provides CMS with adequate funding to meet its growth needs.

The recommended increase for CPCC would allow the college an opportunity to address, in part, its growth needs as well.

Nonetheless, my recommendation for education represents a clear funding increase.

County Services account for the remainder of the budget at $626,150,040.   This includes funding for all County operations and outside agencies, excluding education and debt service.  This $626,150,040 is a $12,068,560  -- or 2 percent -- increase from the FY03 amended budget.

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IMPACT ON THE BOARD'S VISION

Given the breadth of the Community & Corporate Scorecard, the recommended budget provides a balanced approach to funding services.  Debt service accounts for 8.95 per cent of total county dollars; County Services is 42.91 percent; and Education Services receives the highest percentage of county dollars at 48.14 percent.

At this tax rate and funding level, most County departments will realize a reduction in service levels, despite an overall slight increase in total county funding.  This dichotomy exists because County departments were required to absorb within their budgets the rising costs of personnel, including an average 20% increase in health costs and the annualized cost of operating new facilities.  Departments were allowed to maintain vacant positions only if they were able to offset the personnel costs by making other reductions in their department budget. 

Service Reductions

I mentioned earlier that the recommended budget includes $21.9 million in reductions, including the elimination of 120 positions, for a net reduction of 86 positions from the FY03 amended budget.    Time does not permit me to list these reductions but they are provided for the Board under the tab labeled "Cost efficiencies/service reductions."  However, I will point out that all but two of these positions are vacant.  I also should mention that virtually all County departments would experience a reduction in the recommended budget.

I mentioned earlier that our strategies included identifying cost savings and other efficiencies as well as directing departments to assume within their target budgets various overhead cost increases.

In many departments, absorbing these rising costs requires a reduction in positions and in services to the community.  These reductions represent the lowest funding priorities identified by each department, based on the department's mission and contribution to the Board's Community & Corporate Scorecard goals.

There also are additional reductions recommended as part of prioritizing expenditures, including the elimination of the Community Development Department and 50 percent operating funding cuts to the Arts & Science Council and to WTVI.   These cost efficiencies and service reductions total $21,946,311 million.  A summary of the efficiencies/reductions identified to attain the recommended budget is found in the recommended budget document behind the tab labeled cost efficiencies/service reductions. 

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Investing in Employees

One of the major commitments this recommended budget makes to the Board's vision and Scorecard is in retaining our workforce and investing in employees as our most important resource.  To achieve our scorecard goals, we must have a pay-for-performance compensation plan that is tied to the results the Board seeks to achieve.  A pay-for-performance plan is an essential component for achieving the results desired in a balanced scorecard environment and fully supported and emphasized by the architects of that process.

The Board will recall from the results of the Employee Climate Survey that one of our scorecard red lights received was for employee compensation, specifically the lack of pay-for-performance.  In the current year, the Board provided a 3% increase for all County employees.  The recommended budget would restore pay-for-performance using a salary increase range from 0% - 6% based on employee performance.  This equates to an average 4% increase.  My recommendation also includes maintaining our current benefits package while funding the fourth in a planned five-stage effort to provide a 5% match to employee contributions to tax-deferred accounts.  The total increase for the compensation and benefit plan will be $6,590,546.

The proposed reductions in the recommended budget will have an impact on County services, and therefore on employees.  As a result, County staff will continue to be challenged to meet the needs of a growing community by finding new and creative ways of providing services with diminished resources.

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Addressing Organizational Deficiencies

The impact our customers will experience as a result of budget reductions is more easily recognized when considering services that directly touch customers.  However, it's also important to note that service delivery and organizational and employee capacity will be impacted by reductions to support functions.  These reductions have an indirect but often substantial impact on service delivery over time. 

For example, the use of obsolete PCs and operating systems reduces productivity that manifests itself in reduced customer service and satisfaction.  Customers should not have to wait in line or on the telephone while a computer must reboot to allow staff to retrieve information the customer needs. 

As a result, the recommended budget also provides funding for critical organizational infrastructure needs such as delayed replacement of obsolete PCs, delayed replacement of vehicles and capital reserve to address facility maintenance and technology needs.  Along with investing in employees, this investment in organizational infrastructure serves to maintain the capacity necessary to be the best local government service provider.  Funding for the delayed replacement of PCs is $2,575,795, while replacing approximately 300 vehicles, also delayed last year, will cost $2.1 million through a lease-purchase program.

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Other Increases

The recommended budget also provides $500,000 for economic development.  The Board will decide on a case-by-case basis how to allocated this funding to increase jobs and the county tax base.  There also is a $207,019 funding increase in the Medical Examiner's Office to add 1 full-time forensic pathologist and to mitigate operational deficiencies.

OTHER BUDGET OPTIONS

In addition to the recommended budget, I am providing other budget options, as directed by the Board. 

Current Service Level would require a tax rate increase of 3.03 cents from the recommended tax rate of 76.85.   In addition to restoring reductions identified in the recommended budget, notable funding increases at this level would include:

  • $9,946,001 to fund CMS at full request ($279.9 million)

  • $1,402,607 to fund CPCC at full request ($17.9 million)

  • $2,349,622 for full operations at two new libraries (Freedom Regional and Sugar Creek) plus part-year funding to open the new Steele Creek library.

  • $1,640,592 to restore holiday pay for Sheriff's Office employees and to provide special events security/support

  • $1 million to restore funding in Area Mental Health for child & adolescent residential treatment

  • $1,897,677 to restore funding in Area Mental Health for adult substance abuse treatment contracts and other adult services

  • $207,019 for 1 FTE forensic pathologist and other additional support needed in the Medical Examiner's Office.
  • $605,764 to restore Arts & Science Council funding

  • $542,439 to restore WTVI funding

Full Rollback to offset the half-cent sales tax would require additional reductions of $25 million from the recommended budget.   This budget option would be funded by $730,502,886 million in county dollars and require a property tax rate of 73.74 cents per $100 valuation, a 10.23 cents reduction from the FY03 tax rate and a 3.11 cents reduction from the recommended budget.  This tax rate would equate to a $46.65 annual savings for property owners of a $150,000 home from the recommended budget.

Service reductions required to fund this budget option include the $21.9 million in efficiencies and reductions previously mentioned within the recommended budget plus an additional $25 million in reductions.  This additional reduction includes the elimination of 330 additional positions -- 104 full-time; 3 part-time; and 223 temporary positions --  including 93 filled full-time and 3 filled part-time positions. 

As a result, if the Board were to adopt this budget option, the cumulative impact would be $46.9 million in service reductions, including the elimination of 450 positions -- 196 full-time; 7 part-time; and 247 temporary positions, of which 95 full-time and 3 part-time positions are filled.  The net reduction from FY03 would be 416 positions – 156 full-time; 4 part-time; and 256 temporary positions.

Notable among the full list of additional reductions are:

  • Instead of the $5 million increase for CMS in the recommended budget, the Full Rollback budget would cut CMS funding $4.9million from the current FY03 level.

  • Instead of a $500,000 increase for CPCC in the recommended budget, the Full Rollback budget would cut CPCC funding by $250,000 from the current FY03 level.

There would be $14.4 million in additional reductions to County Services including: 

  • $1.5 million in Area Mental Health  that would cut:

    • residential placement of children or adolescents

    • emergency, after-hours call center

    • adult client housing; and

    • adult substance abuse services.

  • The federal legislative contract with the Ferguson Group would be eliminated

  • A $100,000 cut would eliminate courthouse day care for jurors.

  • A $140,000 cut to Elections would prevent the expansion of Early Voting to additional locations.

  • All funding for Historic Landmarks is eliminated, saving $54,000.  In addition, ceasing this activity frees $1,500,000 in bond proceeds that can be applied toward general debt service.

  • $500,000 in funding for economic development
  • Virtually all grants to Outside Agencies (corporate and departmental) are eliminated See page 46 for a full list of funding and reductions to Outside Agencies at Full Rollback budget.

  • Park & Recreation of $858,708  would:

    • eliminate all general summer day camp programs, special needs summer day camps programs, and the Greenville Pool

    • eliminate summer seasonal inner city neighborhood service contracts; and

    • eliminate 32 Rayfest events, the summer jazz series, and the Asian and Latin-Caribbean cultural festivals.

  • The Health Department's Project HOPE program, an abstinence-based pregnancy prevention program for at-risk teens, would be eliminated.

  • Five branch libraries would be closed, saving nearly $1.3 million and would allow the sale of property that could be used in the future to fund other capital projects,  perhaps to emphasize regional libraries rather than neighborhood libraries. This reduction closes the following branch libraries:  Myers Park; Cornelius; Belmont Center; Carmel; North Park; and Hickory Grove

  • Sheriff's Office of  $1,074,888 would, among other cuts,:
    • Close the Gatling Juvenile Detention Facility and Unit 2 of the Work Release & Restitution Center Unit 2
  • Social Services reduction of nearly $1.4 million would:
    • eliminate all funding for YMCA Strengthening Families Grant
    • close the Senior Nutrition kitchens and outsource all food preparation; and
    • reduce General Assistance offered through Crisis Assistance Ministries, among other reductions
  • The Veterans Services Department would be eliminated
    • Women's Commission programs would be reduced by approximately $353,000 including a reduction in positions.    
  • WTVI's funding would be eliminated  with the exception of funding to maintain the digital equipment and the facility.

The Board will find a full list of the additional $25 million in reductions on page 25 of your budget document.

Rollback 1 -- revenue neutral without growth -- would require additional reduction of $17 million from the recommended budget.  This budget option would be funded by $737,424,111 in county dollars and require a property tax rate of 74.73 cents per $100 valuation, a 9.24 cents reduction from the FY03 tax rate and a 2.12 cents reduction from the recommended budget.  This reduction would equate to a $31.80 total savings for property owners of a $150,000 home from the recommended budget.

If the Board selects this budget option, it may select $17 million in cuts from the list of reductions mentioned above or may opt for other reductions using the Choice Matrix on in the back of the budget document, or using a method of its choice.

Details of these other budget options and the required reductions are location behind the tab labeled "Other Budget Options" in the budget document, and available online at www.4citizenhelp.com. 

For the most part, reductions found in the manager's recommended budget and in the other budget options represent the lowest funding priorities of each county department.  Again, other reductions were identified based on the County's core role and responsibilities in providing services to this community.

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LEAN ENTERPRISE ASSESSMENT CYCLE

Over the past few years, County departments have experienced significant reductions to programs and services, and it is likely that this trend will continue.  As a result, I am announcing today the establishment of a Lean Enterprise Assessment initiative.  The goal of this effort will be to ensure that Mecklenburg County maintains itself as a lean organization.

Beginning in September 2003, the County Manager's Office, under the direction of the General Manager for Strategic Organizational Improvement, and in partnership with the Board of County Commissioners will embark on a systematic assessment of all County programs.  This will begin with an assessment of at least half of the County departments this year, thereby affecting a full assessment and reassessment of all County government programs over the next two years.  An assessment in this timeframe represents a very ambitious undertaking, but one I believe should be attempted.

The assessment will include but will not be limited to:

  • Evaluating the program's link to the County's core responsibilities

  • Determining an appropriate service directive for each program, based on the link to the County's core responsibilities and based on the level of program funding choice (i.e., mandated versus discretionary programs)

  • Evaluating the results achieved relative to the respective department scorecard relative to the Board's Community & Corporate Scorecard

  • Identifying opportunities for process and productivity improvement through  restructuring, privatizing, outsourcing, egovernment and/or other methods.

I believe it is important for the Board to understand the "what" and "why" of the programs it funds.  We propose to use your public policy workshops to present and report our departmental operations and how they hook to the Community & Corporate Scorecard.  We anticipate this will become an ongoing aspect of the continuous improvement effort as part of Managing for Results.

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WEBSITE & PUBLIC INVOLVEMENT

I'd like to point out to the Board and the public that all this information – the entire recommended budget and all budget options – can be accessed on the Internet at www.4citizenhelp.com

The Board will be holding a public hearing on the Manager's Recommended Budget on Thursday, May 29 at 6 p.m. here in the government center meeting chamber. This public hearing will be televised on The Government Channel.

Those who would like to speak may call the Clerk to the Board's Office at 704-336-2559 during normal business hours to sign up.  Anyone also may sign up at the public hearing but because of the number of people expected, it is advised to sign up in advance.

The Board will hold two budget options workshops between now and the public hearing.  These workshops will be held beginning at 2 p.m. on Thursday, May 22 nd and Tuesday May 27 th.  The purpose of these two meetings is to answer specific questions the Board members may have about the recommended budget or any of the budget options and to determine if any additional information is needed by Board members prior to the budget public hearing.

Following the public hearing, the Board has scheduled a series of budget workshops starting at 5 p.m. on June 4, 5, 10, 11, and 12.  The Board is scheduled to adopt the FY04 budget on June 19.

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SUMMARY/CONCLUSION

  • The upcoming fiscal year is likely to bring extreme challenges as well as significant opportunities. 
  • I believe the recommended budget provides Mecklenburg County residents with a balanced approach to meeting the many needs of this community, given the difficult economic circumstances we face. 
  • I also believe this budget provides the Board with the opportunity to make choices about what it believes are the top funding priorities. 
  • Over the next several weeks, the staff will be working with the Board in workshops to explore the details of this budget recommendation to answer questions, and identify the options available to this Board.

QUESTIONS

I will attempt to answer any questions the Board may have at this time.  I would like to suggest that any substantive questions you may have regarding this budget should be provided to your budget director, Matt Williams, and we will provide you the responses at the budget workshops if not sooner.

Thank you.




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