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Home My WebLink AboutCBC Minutes February 2015MEMBERS PRESENT: MEMBERS ABSENT TELEPHONE OTHERS PRESENT: CALL TO ORDER Meeting Date: February 20, 2015 Conference Room 3 Ron Knaggs, Chair Ed Lounds Patrick Campion Jay L. McBee Stephanie Morgan Carl Hensley William Donovan Richard Pancoast John Culverhouse Craig Mundt James Clasby Gwen Morris Jane Bachelor Steven Weaver Dan Kurek, Vice Chair Robert Bentkofsky Sophia Holt Beth Ryder Asheley Hepburn Ed Matthews Mr. Knaggs called the meeting to order at 7:31 a.m. PUBLIC COMMENT No member of the public spoke at the meeting. APPROVAL OF JANUARY 09, 2015 MINUTES Jennifer Hill Sherry Burroughs Laurie Waldie Michael Quinn After a motion by Mr. Pancoast and a second, the minutes were unanimously approved. INTRODUCTION OF OMB DIRECTOR Mr. Bentkofsky introduced the new OMB Director, Asheley Hepburn. Mr. Hepburn gave some information about himself. Each member told their name and background. Citizens' Budget Committee February 20, 2015 Page 2 Mr. Knaggs reviewed the topics on the attached list for 2015. Ms. Morgan asked about the Constitutional budgets. Mr. Bentkofsky told the timing of the requirements. They may be able to review the budgets for the Committee at the June 19th meeting. FY 2014 YEAR-END BUDGET RESULTS Mr. Bentkofsky began with the attached PowerPoint presentation and continued with the attached report. Mr. Mundt asked about a different number on the report. The adoption of the last budget was discussed. Ms. Morris started discussion on grants for small businesses. Revenue exceeding budgets, being conservative on estimates, a canal project and impact fees were discussed. Mr. Knaggs summarized and asked about the Y cent tax. Mr. Lounds started discussion on the gas tax. Mr. Bentkofsky gave information on the interlocal agreement. The cost impact of the railroad was .brought up by Mr. Pancoast. Mr. Knaggs asked that Enterprise Resource Planning be moved to March. Mr. Clasby started dialog about the railroads paying a tax for construction. Mr. Knaggs asked about revenue from Mosquito Control to the General Fund. Ms. Hill answered approximately $2 million. The cost and benefits of the insurance plan for County employees were discussed. ENTERPRISE RESOURCE PLANNING This topic will be moved to March. INFORMAL BOCC MEETING UPDATE The most recent meeting was not budget related. OTHERISSUES Citizens' Budget Committee February 20, 2015 Page 3 Mr. Mundt asked that more Tourism money be assigned to the arts. Mr. Pancoast thinks the dollar amount of the emergency reserve should be increased. Mr. Bentkofsky announced that he will be retiring on April 17tH ADJOURNMENT Mr. Knaggs adjourned the meeting at 9:19 a.m. Respectfully submitted by: Brenda Marlin The next CBC meeting will be held on Friday, March 20, 2015, at 7:30 a.m., in Conference Room 3, at the St. Lucie County Roger Poitras Administration Annex. Citizen's Budget Committee Meeting February 20, 2015 Major Opera` i ands • General & Fine & Forfeiture Funds Unincorporated Area Fund • Building Code Fund • Transportation Trust Fund • Mosquito Control Fund • Health Insurance Fund 2/20/2015 1 Cautionary Trends Favorable Trend Fund is self sufficient as revenues equal or exceed direct and indirect costs. Cautionary Trend Significant and continued reliance on reserves to support recurring operating costs. Continuation of this trend could have a negative impact on the County's financial health. Summary @ 30,000 Feet Favorable Trends • Unincorporated Area Services Fund • Building Code Fund • Mosquito Control Fund Cautionary Trends • General & Fine & Forfeiture Funds • Transportation Trust Fund • Health Insurance Fund n r 2/20/2015 2 February 20, 2015 • FY2014 Year-end Budget Results o General Fund/Fine and Forfeiture Fund o Unincorporated Area Services Fund o Mosquito Control Fund o Building Code Fund o Health Insurance Fund • Enterprise Resource Planning - Project Work Plan and Approximate Time Line March 20, 2015 • Review of Capital Project Funds and Related Issues o Stormwater MSTU Fund o Parks MSTU Fund o Transportation Trust (Gas Tax) Funds • Overview of Local Option Sales Tax April 17, 2015 • Review of Major Budget Drivers o Staffing levels by Department o Budget Composition: ■ Salary and Wages - Impact of wage increases ■ Health Insurance Premiums and Other Benefits ■ Operating Expenses - Fixed costs and other major expense items May 15, 2015 • Overview of Sheriff's budget o By functional area o Budget composition (salaries, benefits, operating expenses and capital) o FY 2016 -significant budget requests • Future Jail Expansion o Judicial System and Population Management Issues June 19, 2015 • Update on FY16 proposed budget - General Fund/Fine and Forfeiture Fund o Revenue/expense summary o June 1 Taxable Value summary (from Property Appraiser) o Proposed tax rate and ad valorem -revenue impact o Budget Gap and other issues To: CBC Members FROM: SUBJECT: DATE: Bob Bentkofsky, Deputy County Administrator FY 2014 Year -End Budget Report February 17, 2015 • 11 Enclosed for your review and information is the year-end budget report for the fiscal year ending September 30, 2014 that will be the subject of our discussions at the February 20' CBC meeting. The report presents the budget results and related analysis for the following major operating funds: • General and Fine and Forfeiture Funds (consolidated) • Unincorporated Area Services Fund • Building Code Fund • Transportation Trust Fund (Gas Tax Funds - Consolidated) • 'Mosquito Control Fund • Health Insurance Fund The report compares the amended budget to actual year-end results for the major revenue sources and the most significant expenditure categories of each fund listed above. Of the six funds, the financial trends for three are favorable — in other words they are self-sufficient and do not rely on reserves to support operations. Three other funds have financial trends that are uncertain or cautionary due to their significant reliance on reserves (i.e. fund balance) to support recurring operating costs. Continuation of current trends could have a negative impact on the County's financial health. Favorable Trend Cautionary Trend Unincorporated Area Services Fund General and Fine and Forfeiture Funds Building Code Fund Transportation Trust Fund Mosquito Control Fund Health Insurance Fund FY 2014 YEAR-END BUDGET RESULTS • General & Fine and Forfeiture Funds (Consolidated) • Unincorporated Area Services Fund • Building Code Fund • Transportation Trust Fund (Gas Tax Funds - Consolidated) • Mosquito Control Fund • Health Insurance Fund GENERAL FUND/FINE & FORFEITURE FUND FY 2014 YEAR-END OPERATING RESULTS Change in Fund Balance - General Fund and Fine and Forfeiture Fund The County Commission has adopted the following financial policies in an effort to maintain a strong financial position that provides flexibility to respond to emergency circumstances: • Emergency reserves are designated in an amount equal to 5% of the total for all operating budgets (excluding those funds that maintain their own reserve equal to 10% of the operating budget or $2 million). At the end of FY14, the emergency reserve was equal to $8.7 million. • A designated reserve equal to 5% of the General Fund operating budget. At the end of FY14, this reserve amount was equal to $3.5 million. Presently, the County meets both the emergency reserve and 5% unassigned reserve requirements. The remaining fund balance is assigned or designated for budget stabilization and economic uncertainties, maintenance improvement projects and for prior financial commitments made in prior years to Torrey Pines and various human service agencies. Excluding emergency reserves and other assigned or desi n� fund balances, the beginning fund balance at October 1, 2013 was $62 million. As detailed in the balance of this report, FY 14 expenses exceeded revenues by $4.7 million resulting in an ending fund balance at September 30, 2014 of $59.4 million. To reiterate - the ending fund balance excludes approximately $17.9 million that is assigned to the emergency reserve ($12.2 million) and other financial commitments made in prior years ($5.7 million), and therefore is not available to support the operating budget or other discretionary budget items. General Fund and Fine and Forfeiture Fund: Beginning Fund Balance @ 10/01/13 $61,968,425 Plus: FY 13-14 Operating Revenues 126,744,645 Less: FY 13-14 Operating Expenses .(131,481,992) Ending Fund Balance @ 09/30/14 $57,231,078 The actual use of $4.7 million of fund balance during FY14 was significantly less than the appropriated fund balance amount of $17.9 million in the amended budget. While the $13.2 million gap between the amount of fund balance appropriated to balance the budget and the amount used at year-end is significant - it is not unusual. This gap can be attributed to the statutory requirement to withhold 5% of anticipated revenues for budgeting purposes (equal to about $6.1 million) coupled with budgeting 100% of anticipated expenditures - despite the fact that underspending typically occurs in most fiscal years. Revenues Better than expected revenue performance was a contributing factor to using less fund balance compared to the amended budget. Not unlike in other fiscal years, all revenues benefitted from the 5% statutory withholding that provides for a measure of setting conservative revenue estimates for the adopted budget. This was most evident for all current income received during the year of $121.4 million, which exceeded budget by $5.6 million or 4.8%. In other words, the County recovered almost all of the 5% withholding amount of $6.1 million. Some of the revenue highlights from FY14 can be summarized as follows: ® Total General Fund revenue (including transfers from other funds) exceeded the amended budget by $5.4 million or 4.5%. ® Property tax revenues reached 98.3% of the budget estimate, which is the expected level given the discount received for early payment of property taxes. ® All recurring revenues with the exception of interest earnings and property taxes exceeded budget projections. ® Higher, than expected revenues for State Revenue Sharing and the Half Cent Sales reflectd improving economic conditions. The comparison of the amended budget vs. actual revenue among the major revenue categories is as follows: GENERAL FUND & FINE & FORFEITURE FUND 3 Amended Variance vs. Budget Actuals Amended Revenues Property Taxes 103,091,669 101,345,826 (1,745,843) -1,7% Local Communications Service Tax 900,000 927,660 27,660 3.19 Electric Franchise Fee 4,033,705 4,047,263 13,558 0.33 State Revenue Sharing 2,554,000 3,070,595 516,595 20.2% Half Cent Sales Tax 2,947,193 3,642,779 695,586 23.6% Indirect Cost Reimbursement 2,845,374 2,896,411 51,037 1.8% Charges for Service, Fees and Misc. 2,454,166 3,152,034 697,868 28.4% Rent, Drug Lab Fees and Other 1,675,386 1,698,148 22,762 1.4% Interest Earnings 1,410,237 631,736 (778,501) 55.2% Less 5% (6,079,065) 0 6,079.065 Sub -Total: Current Income 115,832,665 121,412,453 5,579,788 4.8% Transfers In 5,492,995 5,332.192 (160,803) -2.9% Sub -Total 121,325,660 126,744,645 5,418,985 4.5% Appropriated Fund Balance: Operating Budget Support 17,916,163 Unassigned 45,395,795 -Torrey Pines (assigned) 2,500,000 Human Service Agencies (assigned) 3,227,066 Emergency Reserve (assigned) 12,203,550 Sub -Total: Fund Balance Forward 81,242,574 Total Revenues & Fund Balance 202,568,234 126,744,645 3 Expenditures Significant under -spending of $7.8 million or 5.6% was another major factor that contributed to using less fund balance than reflected in the amended budget. Of this amount, about half was attributed to the County Commission's departmental operations, which were under -budget by $3.9 million or 10%. Of this amount, personnel costs were underspent by $1.8 million or 7.6% and operating expenses were underspent by $2.1 million or 14%. There were a variety of other categories such as the Constitutional Officers, capital improvements and economic development incentives that also were underspent and contributed to the use of less fund balance. The comparison of the amended budget vs. actual expenses incurred among the major expense categories is as follows: Amended I Variance vs. Expenditures Budget Actuals Amended Departmental Operations County Commission Operations 39,222,456 35,297,784 (3,924,672) -1o.o% Constitutional Officers 80,390,192 79,138,678 (1,251,514) -1.6% Excess Fees from Constit. Officers (3,153,203) (3,074,994) 78,209 -2.5% Insurance, Audit, VAB & Other 1,873,298 1,371,299 501999 -26.8% Sub -Total: Departmental Operations 118,332,743 112,732,767 (5,599,976) -4.7% Contributions & Other Pavments Health Dept & Other Outside Agencies 1,125,702 1,141,933 16,231 1.4% Contributions to Human Service Agencies 1,053,203 1,044,203 (9,000) -0.9% Judicial Agencies 1,392,598 1,358,402 (34,196) -2.5% Medicaid Payment 3,135,248 3,135,248 0 0.0% CRA Payments 2,856,000 2,770,669 (85,331) -3.0% Econ. Development Incentives 2,220,758 1,621,542 (599,216) 47.o% Sub -Total: Contributions & Other Payments 11,783,509 11,071,997 (711,512) -6.0% Capital Improvements Maint. Improvement Projects 1,477,470 565,388 (912,082) -61.7% New Voting Equipment 1,221,219 1,221,218 (1) 0.0% Phone System Replacement 650,000 67,415 (582,585) -89.6% Sub -Total: Capital lmprovements 3,348,689 1,854,021 (1,494,668). -44.6% Transfers to Other Funds 5,776,882 5,823,207 46,325 0.8% Sub -Total: Excluding Reserves 139,241,823 131,481,992 (7,759,831) -5.6% Reserves: Designated for Torrey Pines Payments 2,500,000 (2,500,000) -100.0% - Designated for Human Service Agencies 3,227,066 (3,227,066) -100.0% Designated for Emergency Reserves 12,203,550 (12,203,550) -1oo.o% - Undesignated 45,359,205 (45,359,205) -1oo.o% Sub -Total: Reserves 63,289,821 (63,289,821) -1oo.0% Total Expenditures & Reserves 202,531,644 131,481,992 (71,049,652) -35.1% Change in Fund Balance (+/-) (17,916,163) (4,737,347) 13,178,816 -73.6% Ending Fund Balance 61,982,878 75,161,694 4 UNINCORPORATED AREA SERVICES FUND FY 2014 YEAR-END OPERATING RESULTS The Unincorporated Area Services Fund includes services that are provided to and benefit unincorporated area residents only, including Planning, Code Enforcement, Animal Control and Environmental Regulation. Consequently, the main source of budget financing is a dedicated property tax levy of .4380 mills that is levied on unincorporated area property owners. Change in Fund Balance The beginning fund balance at October 1, 2013 was $2,051,795, which met the target reserve level $2 million. During FY14, revenues exceeded expenses by $288,000 and fund balance grew by a commensurate amount. Beginning Fund Balance @ 10/01/13 $ 2,051,795 Plus: FY 14 Operating Revenues 3,496,765 Less: FY 14 Operating Expenses (3,208,711) Ending Fund Balance @ 09/30/14 $ 2,339,849 Revenues Total operating revenues of approximately $3.5 million were $316,000 or 10% over -budget. The positive variance was evenly split between property taxes and other non -ad valorem revenues such as development review fees, code enforcement violations and mobile home licenses. The positive variance can be attributed to improving economic conditions that resulted in stronger than expected development review fees coupled with other revenues that exceeded budget estimates as a result of the statutory 5% withholding. The comparison of the amended budget vs. actual revenue among the major revenue categories is as follows: UNINCORPORATED AREA SERVICES FUND (102) Revenues Property Taxes Non -Ad Valorem: - Mobile Home Licenses - Development Review Fees - Code Enforcement Violations - Interest, Fees and Misc. Less 5% Sub -Total: Current Income Appropriated Fund Balance: Operating Budget Support Undesignated Total Revenues & Fund Balance Amended Budget 2,925,165 125,000 58,500 101,500 137,660 (166,716) 3,181,109 450,605 1,601,190 5,232,904 Variance vs. Actuals Amended 2,940,815 15,650 o.5% . 120,376 124,860 154,306 156,408 0 3,496,765 3,496,765 (4,624) 66,360 52;806 18,748 166.716 315,656 -3.7% 113.4% 52.0% 13.6% 9.9% G7 Expenditures As indicated below, departmental operations were underspent by $420,000 or almost 12%. Personnel costs were underspent by approximately $163,000 or 7% as a result of normal turnover and operating expenses were underspent by approximately $236,000 or 22%. Operating expenses were affected by lower costs for professional and contractual services coupled with a revision to the contract with the Humane Society. The comparison of actual expenses incurred vs. the amended budget among the departmental operations and other major expense categories is as follows: Expenditures BCC Operations: - Planning 1,316,526 1,120,253 (196,273) -14.9% -Economic Development 51,325 15,646 (35,679) -695% - Code Enforcement & Permitting 837,823 751,716 (86,107) -10.3% - Environmental Regulation 276,459 257,602 (18,857) -6.8% - Animal Control 569,667 510,402 (59,265) -10.4% insurance/Bonds and Misc. 43,749 41,064 (2,685) -6.1% Indirect Costs 349,906 349,906 0 0.0% Tax Collector & Property Appraiser Fees 101,997 81,296 20701 -20.3% Sub -Total 3,547,452 3,127,885 (419,567) -11.8% Transfers to Other Funds 84,262 80,826 (3,436) -4.1% Reserves (undesignated) 1,601,190 0 (1,601,1901 100,0% Total Expenditures & Reserves 5,232,904 3,208,711 (2,024,193) -38.7% Change in Fund Balance (+/-) (450,605) 288,054 738,659 Ending Fund Balance 1,601,190 2,339,849 6 BUILDING CODE FUND FY 2014 YEAR-END OPERATING RESULTS Change in Fund Balance The beginning fund balance at October 1, 2013 was $2,122,308, which met the target reserve level of $2 million. During FY14, continued improvements in state and regional economic conditions resulted in stronger than expected revenue growth from building permit fees. Consequently, revenues exceeded expenses by almost $500,000 and fund balance grew by a commensurate amount. Beginning Fund Balance @ 10/01/13 $ 2,122,308 Plus: FY 14 Operating Revenues 1,593,196 Less: FY 14 Operating Expenses (1,093,860) Ending Fund Balance @ 09/30/14 $ 2,621,644 Revenues Improving economic conditions were most evident in Port St. Lucie's rebounding real estate market during FY 2014. As reflected in the table below, permit revenue of $1.4 million was the highest amount received since FY 2008. There was also stronger than expected revenue growth from contractor renewal fees. The revenue increase tracked the increase in building activity and for the unincorporated area as reflected in the following key metrics: • Total permits issued compared to the prior year increased by 876 permits or 15.4% (5,703 permits in FY 13 vs. 6,579 in FY 14). • The number of building inspections increased by from 17,900 in FY13 to 21,300 in FY14, an increase of 19%. • The value of total permits issued increased from $68.9 million in FY 13 to $95.4 million in FY 14. The comparison of actual vs. adopted revenue among the major revenue categories is as follows: BUILDING CODE FUND (491) 7 Amended Variance vs. Budget Actuals Amended Revenues Building Permits & Fees 933,565 1,392,352 458,787 49.1% Contractor Renewal Fees 115,000 153,915 38,915 33.8% Interest and Other Fees 27,000 46,929 19,929 73.8% Less 5% (53,778) 0 53.778 Sub -Total: Current Income 1,021,787 1,593,196 571,409 55.9% Appropriated Fund Balance: Operating Budget Support - Undesignated 2,122,308 Total Revenues & Fund Balance 3,144,095 1,593,196 7 Expenditures Total year-end operating expenses for the Building Service Fund were just under $1.1 million, which tracked with the amended budget as reflected in the table below. In an effort to capture all building code and permitting costs, the FY 2015 budget now includes personnel costs for five (5) permit technicians that were previously funded from the Unincorporated Area Services Fund. This change will increase the budget by $532,000. Nonetheless, the Building Code Fund is expected to remain self-sufficient given current economic trends. The comparison of actual expenses incurred vs. the amended budget among the major expense categories is as follows: Variance Amended VS. Budget Actuals Expenditures 5.2% (33,631) Personnel Costs 743,854 782,274 Operating Expenses 341,124 307,493 Sub -Total 1,084,978 1,089,767 Transfer to General Fund 4,093 4,093 Reserves (unassigned) 2,055,024 0 Total Expenditures & Reserves 3,144,095 1,093,860 Change in Fund Balance (+/-) (67,284) 499,336 Ending Fund Balance 2,055,024 2,621,644 Variance VS. Amended 38,420 5.2% (33,631) -9.9% 4,789 0.4% 0 0.0% (2,055,024) soo.o% (2,050,235) -65.2% 566,620 8 TRANSPORTATION TRUST FUND FY 2014 YEAR-END OPERATING RESULTS As presented in this report, the Transportation Trust Fund consolidates five (5) separate funds, four (4) of which are supported by gas tax revenues (the other fund is for. MSBU administration). The recurring revenues and fund balance support both Public Works operations (Road and Bridge, Engineering and Administration) and capital improvements such as road resurfacing, road and drainage improvements and heavy equipment replacement. Change in Fund Balance While the combined beginning fund balance at October 1, 2013 was approximately $10.4 million, FY14 expenses exceeded recurring revenues by $2.3 million resulting in a commensurate decline in fund balance to $8.1 million. As currently structured, gas tax revenues are not sufficient to cover both operating and capital expenses. Consequently, reserves are being used to subsidize operations and provide funding for one-time capital improvements and annual resurfacing and other road maintenance improvements. Beginning Fund Balance @ 10/01/13 $10,439,290 Plus: FY 14 Operating Revenues 7,142,522 Less: FY 14 Operating Expenses (7,814,728) FY 14 Capital Expenses/Transfers (1,666,899 Total Expenses 9,481,627 Ending Fund Balance @ 09/30/14 $8,100,185 Revenues Total operating revenues of $7,142,522 were $680,000 or 10.5% over -budget as gas tax revenues were responsible for most of the positive variance. The comparison of the amended budget to actual results among the major revenue categories is as follows: TRANSPORTATION TRUST FUND (101-101004) 7 Amended Variance vs. Budget Actuals Amended Revenues Gas Taxes 6,200,000 6,332,126 132,126 2.10 Permits, Interest and Misc. 203,735 429,211 225,476 110.7% Less 5% (320,287) 0 320.287 Sub -Total: Current Income 6,083,448 6,761,337 677,889 11.1% Transfer from General Fund 375,000 375,000 0 0.0% (from emergency reserves - Indian River Dr. repair) Transfer from Other Funds 3,548 6,185 2,637 74.3% Sub -Total 6,4611996 7,142,522 680,526 1o.5% Appropriated Fund Balance: Operating Budget Support 2,666,204 (2,666,204) -1oo.o% Capital Budget Support 5,505,135 (5,505,135) -1oo.o% Unassigned 2,267.951 (2,267,951) -100.0% Sub -Total 10,439,290 (10,439,290) -1oo.o% Total Revenues & Fund Balance 16,901,286 7,142,522 (9,758,764) -57.7% 7 Expenditures Excluding reserves, actual expenses were underspent by $5.1 million under budget of which 75% or $3.9 million was related to capital projects that were not completed in FY14. The remaining underspending of $1.26 million was related to departmental operations, which were underspent by approximately 14% compared to the amended budget. Once the FY14 projects are completed in FY15, there will be a further draw down of fund balance. Meanwhile, departmental operations will require a continued subsidy from reserves since gas tax revenues are not sufficient to cover all operating costs. In order to fund both recurring operations and capital improvements, general revenue in the form of a transfer from the General Fund will be required in either FY 16 or FY 17. 10 Amended Variance vs. Budget Actuals Amended Expenditures BCC Operations: - Engineering 1,596,198 1,528,572 (67,626) -4,2/ - MSBU Administration 311,874 81,992 (229,882) -73.7% - Road and Bridge -Maintenance 3,940,037 3,442,537 (497,500) -12.6% - Drainage 1,613,339 1,265,375 (347,964) -Traffic 1,345,336 1,233,733 (111,603) - Public Works Administration 265,155 262,519 (2,636) -s.o% Sub -Total: BCC Operations 9,071,939 7,814,728 (1,257,211) -13.9% Capital Improvements and Major Maintenance Projects - Road and Bridge Improvements 516,520 132,693 (383,827) -74.3% —Drainage Improvements 3,931,767 1,126,727 (2,805,040) -71.3% - Equipment Replacement 259,898 249,966 (9,932) -3.8% - Sidewalk Improvements 796,950 105,552 691398 -86.8% Sub -Total: Capital Improvements 5,505,135 1,614,938 (3,890,197) -70.7% Transfer to Other Funds 56,261 51,961 (4,300) -7.6% Sub -Total: Excluding Reserves 14,633,335 9,481,627 (5,151,708) -35.2% Reserves 2,267,951 0 (2,267,951) soo.o% Total Expenditures & Reserves 16,901,286 9,481,627 (7,419,659) -43.9% Change in Fund Balance (+/-) (8,171,339) (2,339,105) 5,832,234 Ending Fund Balance 2,267,951 8,100,185 10 MOSQUITO CONTROL FUND FY 2014 YEAREND OPERATING RESULTS The Mosquito Control Fund is the funding vehicle for a dependent district that is governed by the Board of County Commissioners. The District levies a dedicated property tax on approximately 98% of property owners throughout the County and therefore is viewed as a countywide service. In FY14, the millage rate was set at .4065 mills in an effort to increase the reserve to $4 million. As that reserve level was met, the millage was reduced to .2522 mills in FY15 with the difference being shifted to the General Fund. Change in Fund Balance As reflected below, the beginning fund balance at October 1, 2013 was approximately $2.8 million. Acting on a recommendation from the Citizen's Budget Committee, the Board of County Commissioners directed that the reserve be increased to $4 million as a contingency for unanticipated costs associated with natural disasters. Higher property tax revenue generated from a .2029 millage increase (between (FY13 and FY14) coupled with underspending of $629,000 within the operating budget resulted in an ending fund balance of $5.46 million. Beginning Fund Balance @ 10/01/13 $ 2,773,574 Plus: Variance vs. FY 14 Operating Revenues 5,911,694 Less: Amended FY 14 Operating Expenses (2,955,336) FY 14 Capital Expenses/Transfers ( 271,818) Total Expenses 3,227,154 Ending Fund Balance @ 09/30/14 $ 5,458,114 Revenues Operating revenues exceeded the amended budget by $202,000 or 3.5% as property tax revenues benefitted from the 5% statutory withholding that provides for a measure of conservatism with revenue estimates for the adopted budget. Actual collections reached 98% of the budget estimate, which is the expected level given the discount received for early payment of property taxes. MOSQUITO CONTROL FUND (145) 11 Amended Variance vs. Budget Actuals Amended Revenues Property Taxes 5,970,099 5,846,518 (123,581) -2.1% Interest Earnings and Misc. 40,000 65,176 25,176 62.9% Less 5% (300,506) 0 300.506 Sub -Total: Current Income 5,709,593 5,911,694 202,101 3.5% Appropriated Fund Balance: - Undesignated 2,773,574 Total Revenues & Fund Balance 8,483,167 5,911,694 11 Expenditures As indicated below, departmental operations were underspent by $629,000 or 17.5%. Personnel costs were underspent by approximately $118,000 or 8% as a result of normal turnover and operating expenses were underspent by approximately $472,000 or 24%. Operating expenses were affected by underspending for professional and contractual services and lower chemical costs. The comparison of actual expenses incurred vs. the amended budget among the recurring operating costs and capital improvement expenses is as follows; Ending Fund Balance 4,615,268 5,458,114 12 Amended Variance vs. Budget Actuals Amended Expenditures Personnel Costs 1,441,749 1,324,021 (117,728) -8.2% Operating Expenses 1,979,706 1,507,856 (471,850) -23.8% Tax Collector & Property Appraiser Fees 162.698 123,459 (39,239) -24.1% Sub -Total 3,584,153 2,955,336 (628,817) -175% Capital Improvements Equipment Replacement 40,986 40,363 (623) -1.5% Land Acquisition 189,828 189,828 0 0.09/. Sub -Total 230,814 230,191 (623) -0.3% Transfers Out 52,932 41,627 (11,305) -21.4% Reserves 4,615,268. 0 (4,615,268) 1oo.o% Total Expenditures & Reserves 8,483,167 3,227,154 (5,256,636) -62.0% Change in Fund Balance (+/-) 1,841,694 2,684,540 842,846 45.8% Ending Fund Balance 4,615,268 5,458,114 12 HEALTH INSURANCE FUND FY 2014 YEAR-END OPERATING RESULTS The Health Insurance Fund is an internal service fund that captures all medical claims expenses, reinsurance premiums, operational costs of the health and wellness clinic, and other indirect administrative costs. The expenses of this fund are supported through premiums that are charged to the various operating budgets of the Board of County Commissioners and all Constitutional Officers except the Sheriff, To the extent that premiums are insufficient to support all. medical plan costs, health insurance reserves are used as a subsidy. The use of reserves to subsidize premiums started in FYI in an effort to avoid premium increases that would impact the County budget and the employee cost -share. Change in Fund Balance As reflected below, the beginning fund balance at October 1, 2013 was justunder$16 million of which $1.7 million is designated as a "safe harbor" reserve equal to 2 -months of estimated claims expenses. As reflected in the summary below, expenses exceeded internal service charges and other revenues by $4,863,816 with the negative variance covered by reserves. Beginning Fund Balance @ 10/01/13 $15,943,824 Plus: FY 14 Operating Revenues 9,242,326 Less: FY 14 Operating Expenses (14,106,142) Ending Fund Balance @ 09/30/14 $11,080,008 Revenues Of the $9.2 million, approximately $7.66 million or 83% represents premiums charged to the operating budgets and reflects the premium paid on behalf of County employees. Conversely, only 7% of all revenues or $654,000 represents the employee share of premium costs. The remaining 10% of all revenue or $930,000 includes stop loss reimbursements (for claims in excess of $125,000), interest earnings, rebates and other settlements. HEALTH INSURANCE FUND (505) Revenues County Contribution for Employee Health Insur Cobra Payments Employee Contributions Stop Loss Reimbursements Rebates, Settlements, Misc. 2.5% Administrative Fee Interest Less 5% Sub -Total: Current Income Appropriated Fund Balance: Operating Budget Support Undesignated Total Revenues & Fund Balance Amended Budget 8,485,752 35,000 667,884 0 27,482 206,663 250,000 (12,500) 9,660,281 3,326,672 12,617,152 25,604,105 Actuals 7,658,608 51,997 653,668 351,095 234,110 186,261 106,587 0 9,242,326 9,242,326 Variance vs. Amended (827,144) 16,997 (14,216) 351,095 206,628 (20,402) (143,413) 12,500 (417,955) -9.7% 48.6% -2.1% 751.9% -9.9% -57.4% 100.0% -4.3% 13 Expenditures Of the $14.1 million incurred during FY 14, approximately 74% or $10.5 million was related to medical claims and pharmaceutical costs. The other significant expenses included reinsurance premiums at $1.24 million, the health and wellness clinic at $1.2 million and third party administration services provided by Florida Blue at $693,000. Ending Fund Balance 12,467,152 11,080,008 14 Amended Variance vs. Budget Actuals Amended Expenditures Claims Expenses 9,534,392 10,449,918 915,526 9.6% Health and Wellness Center 1,178,981 1,179,885 904 0.1% Wellness Program 150,000 3,725 (146,275) -97.5% Reinsurance Premiums 1,058,386 1,242,551 184,165 17.4% Florida Blue Admin. Fee 666,885 692,722 25,837 3.9% Dental Subsidy 120,000 114,383 (5,617) -4.7% 3rd Party Fees and Misc. 36,451 38,709 2,258 6.2% Indirect Costs 253,261 253,261 0 0.0% HR Administrative Costs 136,736 129,127 (7,609) -5.6% Sub -Total 13,135,092 14,104,281 969,189 7.4% Transfers to General Fund 1,861 1,861 0 0.0% Reserves 12,467,152 0 (12,467,152) 100.0% Total Expenditures & Reserves 25,604,105 14,106,142 (11,497,963) -44.9% Change in Fund Balance (+/-) (3,476,672) (4,863,816) (1,387,144) 39.9% Ending Fund Balance 12,467,152 11,080,008 14