Botetourt County, Virginia FY 2018 Budget Summary · FY17 Budget. Federal revenues are budgeted to...

Botetourt County, Virginia Budget Summary

FY 2018

Botetourt County, Virginia

Section 1: 1 Adopted April 25, 2017

Budget Summary - Narrative FY 2018

INTRODUCTION The information contained in this book is comprised of revenues, expenditures, and the Capital Improvement Plan (CIP) budgeted for Botetourt County for the fiscal year ending June 30, 2018 (FY18). Also included are highlights and graphics for several key areas. The detail presented herein focuses on County, non-School operations; Botetourt County Public Schools develops its own budget at the detailed level. This book serves to provide County-based information (with the exception of the inclusion of total revenues and total expenditures for the School unit) to both internal and external users of this data. Budget Process The annual budget process for the County begins in November and typically runs through April. The General Fund Budget Subcommittee began meeting in March 2017 with several meetings held throughout the process. The entire Board of Supervisors acting as the Budget Committee met as well. The budget process did not take as long as the previous year’s (FY17) due to several key issues, the budget adoption in April was timely and lent consideration to all budget issues presented. The County’s budget development process is an undertaking which requires input and participation from all departmental managers, including representation from the Constitutional officers. Several reiterations of the draft budget are developed as preliminary estimates and are fine-tuned with relevant data as it becomes available, including economic factors and feedback from federal and state agencies. The County's FY18 Budget focuses on the impact on the General Fund, including support provided to the Schools and Debt Service. The County Administrator has the task of presenting a draft version of the budget to the Budget Committee, which is composed of members of the Board of Supervisors. Work sessions are then utilized to refine the budget. The budget is then advertised for public hearing purposes. Following the public hearing, the Board of Supervisors considers further revisions and may hold additional work sessions, if necessary (which was not the case for FY18). The Botetourt County FY18 Budget was adopted on April 25, 2017 by the Board of Supervisors. This budget is the result of the combined efforts of departmental managers, representatives of constitutional offices, and other local agency managers in order to deliver a responsible draft budget for the County Administrator to review, to provide the Budget Committee with a sound document for its review, and to lead to eventual adoption by the Board of Supervisors. Board of Supervisors – Strategic Planning During FY15, the Botetourt County Board of Supervisors adopted strategic planning initiatives which gave consideration to a future 30+ year planning horizon. The process yielded strategic priorities listed below, with several of these items incorporated in each annual budget since then.

Thriving Business Environment

The Gateway Center

Botetourt Cool

Lifelong Learning Excellence

Responsible Governance

Responsive Government

Strategic Land Use

Ample & Reliable Infrastructure and Facilities




REVENUES General Fund Total General Fund revenues for FY 18 are expected to be $62,197,142 from local, state, and federal sources. When compared to FY17 Budget ($59,804,031), total General Fund revenues are expected to increase by $2,393,111 (4.0%). On an overall basis, local revenues comprise 81% of General Fund budgeted revenues, with State and Federal revenues representing 18% and 1%, respectively. This distribution of funding reflects a 0.5% increase in Local revenues, and 0.5% decrease in Federal revenues with Stare revenues holding at 18% of total revenues, when compared to the FY17 budget revenue distribution. There are no tax increases for existing taxes in the FY18 Budget. In reviewing by component, local revenues are budgeted to increase by $2,286,875 (4.8%) when compared to the previous fiscal year. Notable categorical budgeted revenue increases are as follows, with budgeted revenue increases of at least $160,000 each: Public Service Corp. Taxes $1,055,000 (50%) Personal Property Taxes $ 635,000 (11%) Other Local Taxes $ 300,000 (4%) Recovered Costs $ 162,000 (15%) Budgeted increases in these categories are supported by strong results for FY17. With respect to Public Service Corporation Taxes, $900,000 of the increase relates to tax revenues for a new AEP Cloverdale transfer station. Personal Property Taxes were very strong in FY17, and continues to grow. Other Local Taxes include Local Sales & Use Taxes, Business License Taxes, and Hotel and Meals Taxes, which all show growth. Recovered Costs include Fire & EMS Cost Recovery Program revenues, which are budgeted to increase $120,000 (13%) compared to the FY17 Budget figure. Continuing with the local revenue budget, Revenue from Use of Money & Property is expected to increase $112,000 (27%), due to increased balances and an increase in interest rates. Finally, the County's primary traffic exit from Interstate 81 (Exit 150), which began reconstruction in FY16, will be completed in FY18. It is anticipated that there will be a no significant loss of revenue during FY18, as the construction plan includes measures to minimize loss of business activity. State revenues budgeted for FY18 are expected to increase ($103,000, 1%) when compared to the previous fiscal year. This is primarily due to an increase in Other Categorical Aid, as Children’s Services Act (CSA) reimbursements are budgeted to increase approximately $100,000 (14%) vs. FY17 Budget dollars due to increased mandated services activity in support of at-risk youths. All other State-based revenues are fairly flat vs. FY17 Budget figures. While Compensation Board reimbursements will increase over FY17 actual reimbursements due to a) a 2% across-the board increase for Constitutional officers and their employees, and b) an $80 per year compression adjustment for all Sheriff’s sworn officers having a minimum of 3 years of service up to 30 years, the overall revenue increase vs FY17 budget figures is nominal, as FY17 Compensation Board reimbursements are expected to be less than FY17 Budget. Federal revenues are budgeted to increase slightly ($2,800, 0.3%). This is due to a) a budgeted $15,000 increase in PILT (Payment in Lieu of Taxes) payments, and a $13k (2%) decrease in Welfare payments due to a reduction in the Social Services expense budget.




In summary, due primarily to increases in local revenues, total FY18 revenues are projected to be $62,197,142, representing a $2.4 million (4%) overall increase. EXPENDITURES Budget Process for Operational Expenditures The initial draft of the FY18 Budget submitted by department managers (including Community Organizations) to Administration was approximately $750,000 (2.5%) greater than the final FY17 Original Budget. However, the requests included several personnel additions totaling $367,000 that were eliminated at the Administration Review phase, and placed for consideration for the Budget Committee as budget issues. Another portion of the budget request increase was $175,000 for Children’s Services Act (CSA) mandated services, which ultimately remained in the budget, as these services have increased over the past few years. Also, included in the requests was $400,000 for fire apparatus. This request transformed into an increase in debt service, as it was decided to seek a lease purchase financing agreement for approximately $1.2 million in fire apparatus purchases. These three large dollar requests were partially offset by reduced requests in the majority of departmental areas, with the larger decreases found in Electoral Board / Registrar, Economic Development, and Maintenance departments. One additional item of note was a zero budget for Revenue Refunds ($150,000 budgeted in FY17). These refunds will now be classified as contra revenues, and will directly decrease the revenue account where the original revenue was recorded. The next step is the Administration Recommended stage and is prior to any consideration of items presented as budget issues and employee compensation. At this point in the budget process, there were 25 departments/agencies showing decreases in their budgets, 7 with less than a 1% increase, and 2 with a 2% or less increase. This constitutes a total of 34 out of 40 areas (85%) having decreases or up to a 2% increase. with less than a 2% increase. This budget planning provided the ability to provide departmental/agency increases of greater than 2% to only 6 areas. At the Administration Recommended stage, FY18 budgeted operational expenditures reflected a $381,000 (1.3%) decrease. Capital Improvement Plan (CIP) projects totaled $2,215,000 in the Administration Recommended base budget, which was a $265,000 decrease vs. FY18 requests, and $722,000 (48%) greater than the FY17 Budget. The largest item was $580,000 for a new tax system to replace an antiquated and non-supported (major service and upgrades) current system. This system will be utilized principally by the Treasurer’s and Commissioner of Revenue’s departments. It was subsequently determined that these funds could be accumulated from unspent FY17 CIP monies in the same area (Technology Services CIP). As part of the Administration Recommended stage, $125,000 ($50,000 increase vs FY17) was included for potential compensation adjustments that may result from a current regional wage and benefit study. In addition, this version of the draft budget included $250,000 ($93,000 increase) for Contingency. Finally, as part of the Administration Recommended budget, there was a need to budget for payments of incentives to incoming businesses that are paid through the Economic Development Authority (EDA) of Botetourt County. Between ELDOR Corporation and Home Brew Mart, there will be a total of $1.4 million in local incentive payments to be paid out in the short term, with some of these incentive payments being paid earlier than anticipated due to progress being made. When funding is added for preliminary site engineering and project development costs, $1.85 million was budgeted for Transfers to the EDA.




The Administration-recommended budget reflected a $249,000 use of fund balance to balance the budget. That was including a flat ($24.2 million) annual contribution to the Schools, and before any consideration of raises and other key budget issues. The major issues for Budget Committee consideration were as follows:

(1) Requested Personnel Additions – Technology Services requested a Software Support Analyst. The Sheriff’s Departments included requests for a) two road deputies, a dispatcher, and a nurse for the jail. Fire & EMS requested three full-time Advanced Life Support (ALS) positions, utilizing reductions in overtime and part time budget dollars, and requiring a net $20,000 to cover these new positions in the FY18 Budget.

(2) Request for Fire Apparatus – $400,000 was in included in the Budget Request figures for a fire apparatus. This issue included an alternative to finance $1.2 million of fire apparatus through a lease purchase financing arrangement.

(3) Compensation – It as determined by the State Compensation Board that wage increases provided effective 9/1/16 by Botetourt County Constitutional officers and their department personnel qualified for meeting the local funding requirement for the deferred State increases that were approved by the State to take effect in FY18. Therefore, there was no FY18 mandated local match of State employee raises required. The issue then arose as to whether raises would be provided for employees in the FY18 Budget.

(4) Agriculture Development Officer – A request was made for a new position that would be able to leverage the County’s agricultural assets as a means to quantify, recognize, and grow the agriculture economic base of Botetourt.

The School Division’s FY18 Budget as presented at their March 16, 2017 public hearing included a request flat funding as compared to FY17. While the School Division identified additional needs, they developed a plan to include strategic priorities in their budget while reducing other operating costs to balance their budget. Therefore, the Budget Sub Committee was presented a draft budget which utilized $ 249,000 of fund balance and had to address the above-mentioned issues. The Sub Committee met twice with administration, and twice as a larger group, including a March 28 and April 3 2017 Budget Work Sessions. These efforts and meetings, along with several operational / personnel changes enacted by the County Administrator culminated in an advertised budget which included: 1) A Wind Farms tax rate of $.99. 2) A 1.5% raise to employees earning up to $38,000, and 1.3% for those earning greater. 3) A Nurse position in the Jail. 4) An Agriculture Development Officer position. 5) Three ALS Fire & EMS personnel. 6) A County CIP totaling $1,810,000. 7) $175,000 for potential Personnel Compensation Adjustments. 8) Contingency Funds totaling $177,338. 9) Additional Debt Service of $200,000 relating to the lease/purchase of fire apparatus.




After holding the public hearing on April 18, 2017, there were no changes made to the advertised budget, and the budget was adopted on April 25, 2017, as advertised. General Fund Total operational expenditures for FY18 increased $54,000 (0.2%) vs. the FY17 Budget. In summary terms, major reasons for this net increase are as follows:

(1) Personnel Additions & Associated Costs – A Nurse for the jail, the net impact of 3 Fire & EMS ALS employees, and an Agriculture Development Officer were positions that were included in the FY18 Budget, totaling $200,000.

(2) FY18 Raises for Employees - As previously mentioned, a 1.5% raise was granted for employees

earning less than $38,000 and 1.3% for those employees earning $38,000 or greater. This raise (which was decided to be effective 9/1/17) was included in the FY18 Budget at a cost of approximately $228,000.

(3) Other Compensation – The State provided for Salary Compression adjustments in the amount of

$80 per year for Sheriff’s sworn officers having from 3 to 30 years of service for positions supported by the Compensation Board, while the County will fund those officers not included in Comp Board positions. This calculates to a total gross cost of approximately $80,000. In addition $175,000 was included for potential wage and benefit adjustments based on results of an in-process regional compensation study. This represented an increase of $100,000 vs. the figure budgeted last year. Therefore for these two items, an additional $187,000 was included in the FY18 Budget compared to the FY17 Budget.

(4) Children’s Services Act – Due to increased activity in support for at-risk youths, expenditures for this department increased $159,000

(5) Reductions in Expenditures – As previously mentioned several departments / areas realized reductions in their budget. Seventeen (17) departments had total cost reductions of approximately $570,000. In addition, there was no budget for Revenue Refunds, which will now impact the revenue side rather than the expenditure side, which reflects a $150,000 reduction in budgeted expenditures.

These five factors alone roughly account for the $54,000 net cost increase for FY18. A review of the FY18 Budget from a major functional areas perspective follows. General Government Administration This category decreased $29,000 (0.8%) vs. the FY17 Budget. Electoral/Registrar budget was reduced $54,000 (17%), as the FY17 Budget considered the impact of a presidential election year. Technology Services had a budget reduction of $12,000 (1.3%) due to a decrease in capital outlay expense. Cost increases for legal counsel (Board of Supervisors) and health insurance consulting fees (Deputy County Admin.) represented the large-item increases in General Government Administration.




As with all functional areas, raises and fringe benefit changes will be part of the cost impact vs. the previous budget year. Judicial Administration This category increased a total of $17 (0.0%) vs. the FY17 Budget. Small increases in Clerk of Circuit Court and Commonwealth’s Attorney departments were offset by small dollar decreases in Circuit Court, General District Court, and Magistrate areas. Public Safety This category increased $297,000 (1.9%) vs. the FY17 Budget. Of this total, the Jail Nurse position and the Compression pay adjustment accounts for $165,000 of the total increase. An additional truck and operating costs (including a transfer of costs previously reflected in Debt Services) for the regional animal shelter accounted for an additional $57,000 of increased cost in Animal Control. Other large impact items was a $103,000 (8%) decrease in the Volunteer & Fire & Rescue budget, an additional $56k in Fire & EMS vehicle capital outlay, and the impact of the 1.3% / 1.5% raise (128k). The FY18 budget includes one ambulance and a support services vehicle for Fire & EMS career staff utilization. Public Works This category decreased $77,000 (4%) vs. the FY17 Budget. For General Services Department, fringe benefit funding for a shared position was transferred to Central Garage. The Maintenance Department realized decreases in utilities, maintenance contract, and capital outlay costs. Waste Management was budgeted for an $18,000 increase due to budget right-sizing for recycling activity. Health and Welfare This category increased $97,000 (3.2%) vs. the FY17 Budget. This increase is directly related to the providing of mandated youth services under the Children’s Services Act. Approximately 64% of these costs are reimbursed by the State back to the County. Social Services’ budget decreased $52,000 (3.6%), as the cost reduction efforts also included this agency, due in part to non-recurring costs and several line item administrative costs. Parks, Recreation, and Cultural This category decreased $128,000 (4.4%) vs. the FY17 Budget. Results for all three departments in this County function yielded decreases. Recreation and Facilities had a $27,000 (2%) decrease due to reductions in part-time wages, fuel costs, and capital outlay. Botetourt Sports Complex had a$68,000 (14%) decrease due to personnel realignment, and reductions in operating expenses and capital outlay. Libraries had a $33,000 (3%) reduction due to reductions in maintenance and telecom costs. The budget for the Sports Complex includes funding for installing the infields for the two new fields in order to provide for some use of the fields, although not for tournament play as compared to the other four fields.




Community Development The Community Development functional area’s budget decreased $81,000 (7.5%) vs the FY17 Budget. All of this decrease relates to Economic Development, as this is the second budget year for this area. While the budget includes the new position of Agriculture Development Officer, it also includes other position eliminations and a full-to-part-time reclassification of another position. Budget savings for Economic Development were also reflected in Professional Services, Marketing, and Capital Outlay. The other departments / areas in this County function (Community Development – Planning & Zoning portion, Environmental Management, and Cooperative Extension) all showed zero or very small increases in their FY18 budgets compared to FY17. Non-Departmental The County's Wellness Program costs were budgeted for an additional $5,000 (to $55,000) for FY18 due to the potential for increased program utilization. As previously mentioned, Revenue Refunds were eliminated from this area of the budget ($150,000), and will impact revenues when refunds arise. Also, the provision for Salary & Benefits Compensation Adjustments was increased $100,000 vs. FY17 for potential adjustments relating to the in-process regional study. Contingency Planning As has been the case beginning in FY11, a contingency line is included in the FY17 Budget. This line may or may not be utilized but is available should extraordinary-type expenditures be required that were not anticipated or foreseen at the time of development of the budget. A $177,338 figure is budgeted for contingencies, representing an increase of $20,121. Miscellaneous and Outside Organizations FY18 funding for Miscellaneous and Outside Organizations increased $20,000 (5%). This is due to a $20,000 increase for Virginia’s Blue Ridge (based on formula calculations). Also, there is new funding for memberships in the 1) Western Virginia Regional Industrial Facility Authority ($6,000), and the Roanoke Valley Broadband Authority ($5,000). Funding for the Botetourt and Roanoke Chambers of Commerce and the Roanoke Regional Small Business Development Center is now included in the budget for the Economic Development Department. Debt Service Fund Debt Service Fund expenditures are expected to increase by $152,000 (4.5%) as the budget includes $200,000 for lease purchase financing for $1.2 million for fire apparatus. Approximately $37,000 of funding for debt service for the regional animal shelter is now reflected in Animal Control, while showing a decrease in the Debt Service Fund. CAPITAL IMPROVEMENTS PLAN (CIP) The Board of Supervisors develops a five-year CIP to project the capital needs of the County government. Year 1 of the CIP budget is included in the FY18 Budget; future-year figures are estimates utilized for planning purposes only.




The FY18 CIP Budget totals $1,810,000, which is $317,000 (21%) more than the FY17 CIP Budget. The FY18 CIP Budget is heavily invested in Community & Economic Development, as $675,000 (38%) of the CIP Budget is accounted for in this category. This category includes $250,000 for economic development funding and projects which would yield opportunities for business expansion in the County. There is also $225,000 in this area for payment of current County incentive obligations. In addition, there is funding for a Greenfield Education & Training Center space & utilization study ($50,000), funding for a potential matching of funds relating to Greenfield Historic Preservation initiatives ($50,000), and the first payment of local grant funds ($100,000) toward the Daleville YMCA, should their targeted fund level be reached. Should that fund level be realized, the County’s first payment would be the first installment of a $2.5 million commitment over ten (10) years. Continuing with the FY18 CIP, there is $370,000 set aside Maintenance projects, which would include addressing County buildings and equipment supporting those buildings; these projects have been deferred over several years. General Services CIP projects funding totals $243,000, and includes $150,000 for a solid waste disposal study and plan. Public Safety CIP dollars total $319,000, and covers Fire & EMS radio replacement programs for portable and mobile radios, an evaluation of the current radio system in working toward the installation of a new emergency communications system, which would take place in the future. For the other CIP areas, there is match funding ($100,000) for County greenway development (Recreation & Facilities), $10,000 for the Library Incentive Fund, and $58,000 for the PC/ Laptop Replacement Plan (Technology Services). Funding for new tax software that will serve residents and businesses will be provided by re-appropriated FY17 budget funds. Detailed information pertaining to the FY18 CIP items can be found in Section 4 of this book. TRANSFERS Economic Development Authority (EDA) of Botetourt County A total of $1,850,000 has been included as transfers of funds to the EDA. This includes $1.4 million in total for local economy incentive payments to ELDOR Corporation and Home Brew Mart (Ballast Point), as well as funding for Greenfield preliminary site engineering project, and funding for potential project development. The local incentive payments include payments which would be accelerated (due to progress made) as compared to payments which were originally scheduled over the next few years. School Funding Although having to contend with an additional $1.5 million of new identified cost needs, the School Division was able to address their priorities and contend with decreased enrollment with a flat funding request to the County. The School Budget includes the deletion of eleven (11) positions from their Classified Plan (supported by attrition), $ 1 million in deceases to individual operating budgets, and other cross-department cost savings. Compensation reflects a one-step increase on the pay scale, a 2% pay increase for administrative personnel, and ongoing step corrections for 350 personnel. The School Budget also includes the purchase of six (6) buses using lease purchasing, which is a continuation of a plan which began in FY17 in order to address the prior deferral of bus purchases. The total FY18 contribution from the County to the School is $24,199,282, which is the same as FY17.




General Fund Balance The FY18 Budget is balanced and does not require any supplemental funding from existing fund balance, which was also the case for FY17, which utilized funds from a real estate and personal property tax increase. While a tax rate of $.99 has been included for Wind Farms, the tax rates for existing taxes remained the same. CONCLUSION The FY18 Budget presented in this book is the culmination of months of planning, analysis, and compromise and represents the priorities of the Board of Supervisors for the coming year. Department managers responded to the budget message presented in early communication from executive County administration. There are monetary obligations that will be met over the next few years that will precede the anticipated increase in the tax base that incoming business will yield. In addition, the County will be moving forward with continuing efforts to attract new business. Strategic operational planning and implementation occurred recently, as the Economic Development department has been reorganized, as has also occurred to an extent to Fire & EMS. County resources are being continuously monitored and reviewed to place the County in the best position to provide services to County residents and businesses. This would include reviewing County Code, the Comprehensive Plan and other tools to enhance and ensure proper and responsible development in the future. In looking to the near future, ELDOR, Ballast Point, and the Community College System projects are moving ahead. Business expansion (Dynax America Corporation) is progressing, and the APEX Wind Farm project has received State approval. In addressing housing needs in the County, additional apartments are planned for Daleville Town Center, and other workforce housing development opportunities are being planned. The Gateway Center project at I-81’s Exit 150 will is continuing, with construction to be completed in FY18. This will improve access to the crossroads of the County and provide opportunities for new development. In addition, there will be a focus on agricultural development opportunities that are unique to the County. There is much to be excited about in both the short and long term perspectives as Botetourt County moves forward. Questions or feedback for information provided in this book can be sent to: Anthony G. Zerrilla Adam E. Cody Sexton Director of Finance Management Assistant 6 East Main Street, # 6 5 West Main Street, Suite 200 Fincastle, Virginia 24090 Fincastle, Virginia 24090 Phone: (540) 928-2101 Phone: (540) 928-2010 E-Mail: [email protected] E-Mail: [email protected]



Budget Summary - Graphs FY 2018

Source: Weldon Cooper Center for Public Service

Source: County financial statements Note: FY2015 fund balance includes an Enterprise Fund transfer of approximately $3 million relating to the sale of the County’s water and sewer operations to Western Virginia Water Authority.

33,293 33,423 33,521 33,486 33,176

30,000

30,500

31,000

31,500

32,000

32,500

33,000

33,500

34,000

34,500

35,000

2012 2013 2014 2015 2016

Total Population

15,853,806

20,250,415 19,795,142

24,807,003

22,374,735

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2012 2013 2014 2015 2016

General Fund Balance




Source: County financial statements

2012 2013 2014 2015 2016

Total Revenues 51,050,707 53,961,195 54,549,567 55,850,140 58,818,357

Total Expenditures 51,763,310 51,266,284 55,469,201 54,886,146 61,313,754

45,000,000

47,000,000

49,000,000

51,000,000

53,000,000

55,000,000

57,000,000

59,000,000

61,000,000

63,000,000

65,000,000

Revenues versus Expenditures

1,555 1,534 1,655 1,639

1,848

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2012 2013 2014 2015 2016

Total Expenditures Per Capita




Source: County financial statements

39,335,806 36,504,440

34,024,868 31,898,390

29,236,589

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

2012 2013 2014 2015 2016

Net Bonded Debt

1,182 1,092

1,015 953 881

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2012 2013 2014 2015 2016

Net Bonded Debt Per Capita



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