Dave Lucas NYSAC Director of Finance and Intergovernmental Affairs - - PowerPoint PPT Presentation

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NYSAC Fall Seminar • Sept. 15th 2020

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County 2021 Budget Challenges

NYSAC

Dave Lucas

Director of Finance and Intergovernmental Affairs

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County 2021 Budget Challenges• Sept. 15th 2020

#CountiesForwardTogether

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County 2021 Budget Challenges• Sept. 15th 2020

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Virtual Contests

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1 - Virtual Fall Seminar Tweet-Off 3 - Perfect Attendance Award drawing 2 - #CountiesForwardTogether Instagram Photo Contest

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NYSAC Thanks our Workshop Sponsor:

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County 2021 Budget Challenges• Sept. 15th 2020

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Absolute Auctions & Realty, Inc

2020 Impacts

Orange County

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NYSAC Fall Seminar • Sept. 15th 2020

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Steven M. Neuhaus County Executive

Deborah Slesinski Budget Director

Orange County is in southeastern New York State it has a total area of 839 square miles. As of the 2010 census, the population was 372,813. Orange County #CountiesForwardTogether

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Projection

With help from departments, a 2020 year-end projection was

• completed. While any projection is difficult, this forecast is very
• uncertain. Economic conditions continue to change quickly, and actual

revenue losses will fluctuate. The GDP decreased almost a third in the second quarter of 2020, the worst decrease in over a century. Travel restrictions and quarantines are still being required, and we await the possibility of a second wave in conjunction with flu season.

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2020 Mid id-Year Revie iew – Sale les Tax

• Sales Tax

Orange County sales tax comprises 27% of the revenues in the 2020 budget. Currently, sales tax is down 13.62% from the same time last year. When comparing the period March through May, Orange County had a decrease in taxable sales from 2019 to 2020 of over $576 million dollars (source www.tax.ny.gov). #CountiesForwardTogether

8 $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000

FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST

SALES TAX

2020 Actual County Portion 2019 Actual County Portion

Mid- Year Review - Hotel Tax

• Hotel Tax

The travel and hospitality industry is a significant part of the economy in Orange County. Having hotel rooms empty for 3 months has had a major impact on revenues. Hotel tax supports

• ur Tourism Department and helps to

generate our fund balance. Currently, hotel tax is down 44.6% from the same time last year.

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Tax Shortfalls

Based on different assumptions and guidance from NYSAC, the expected shortfall in sales tax and hotel tax revenues is as follows:

• Sales Tax - $25—$35 million less than budget
• Hotel Tax - $1.7—$2.2 million less than budget

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Additional Revenue Challenges

A shortfall of $2 million in casino revenue is expected. It appears that we could be short $700,000 in court facility revenue and compassionate care funds (sale

• f marijuana) both of which come

from the state. $1.2 million is budgeted in revenue for an auction to sell delinquent properties, which we are hoping to schedule in November, if NYS allows it to happen. Certain state funding is being subject to a 20% withholding as we await further guidance from the state on whether this will become a permanent cut. Orange County DMV has been closed for 3 months and is currently

• perating by appointment only.

DMV fees are down 50% as compared to 2019.

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Strategies Implemented to Cut Spending

Cost Reduction Plan by departments Hiring Freeze Separation Incentive Voluntary Layoffs Justification for all Purchases Freeze on Commodity & Equipment Spending as of 9/30 Freeze on Travel/Conferences Pause on Capital Spending 12

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Cost Reduction by Departments

ORANGE COUNTY REQUESTED EACH DEPARTMENT PROVIDE US WITH A 15% CUT OF THEIR 2020 EXPENSES. WHILE NOT ALL DEPARTMENTS WERE ABLE TO GIVE THE FULL 15%, MANY WERE ABLE TO IDENTIFY ITEMS IN THEIR BUDGET THAT COULD BE PUT OFF OR ELIMINATED. AN ESTIMATED $10.5 MILLION WAS SAVED THROUGH CONTRACTUAL AND EQUIPMENT CUTS.

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Vacancies

• Orange County currently has 286 vacant

FT and PT positions within the county.

• By holding these positions vacant, we

have saved an estimated $11.7 million to date.

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Separation Incentive

County Government came to an agreement with

• ur unions to offer a voluntary incentive to our

employees based on the following terms: $10,000 for Orange County Government employees with 10 up to 20 years of service. $12,500 for Orange County Government employees with 20 up to 30 years of service. $15,000 for Orange County Government employees with more than 30 years of service.

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Separation In Incentive Savings

Orange County had 63 participants from the separation incentive. Approximately $1,966,306 was saved.

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Temporary Layoff Program

Orange County made a Voluntary Temporary Layoff Program available to certain eligible employees from the date of June 1, 2020 through July 31, 2020. Temporary layoffs were instituted in month long increments. Employees could participate for one or both months. Employees from the following County Departments were not eligible to participate due to the nature of their jobs: Valley View, Health Department, Emergency Services and Probation.

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Savings from Voluntary Layoff

The County had 9 participants for June only 22 Participants for July only And 48 participants for both months Orange County saved $426,917 by offering this program.

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Justification of Purchases – Spending Deadlines

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Departments were asked to reduce their 2020 budget by 15%. By limiting non-essential spending, our contractual and equipment purchases are down 20% as compared to 2019, a savings of over $20M. Purchasing typically gets cut off for departments mid October- Early November for Equipment and Commodities. For 2020, we are moving this deadline to 9/30 for both areas, to achieve greater savings.

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Travel Freeze & Pause on Capital Spending

Travel and Conference spending has been restricted since the start of the

• pandemic. We are down

$100K in spending as compared to the same time in 2019.

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Capital spending is currently on pause, with the emphasis on

• nly essential projects. We are

down $2.9M as compared to the same time in 2019.

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Even with all the strategies implemented, we are still projecting a $35 - 40 million deficit at year-end.

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2021 Tompkins County Recommended Budget

Tompkins County Administrator Jason Molino County 2021 Budget Challenges• Sept. 15th 2020

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Tompkins County Recommended Budget • Sept. 15th 2020

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The Bottom Line

• No layoffs
• Elimination of 47 FTEs, 6%

reduction

• Placement strategy for 18

impacted employees

• Revenue concerns
• 8.9% decrease in sales tax
• 55% decrease in casino

revenue

• Potential 20% reduction in

State aid, or greater

• Levy up 4.97%
• Rate only up 1.17%
• $5 increase of solid waste fee
• $83 impact for average

homeowner

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Tompkins County Recommended Budget • Sept. 15th 2020

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July ‘19

Tompkins County – 3.9% Southern Tier - 4.2% New York State – 4.2%

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Tompkins County Recommended Budget • Sept. 15th 2020

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• SNAP (food stamp)

caseloads generally declining

• # of applications

decreased when enhanced unemployment was

• ffered
• Still 40+% higher than

January 2008 (pre- recession)

http://otda.ny.gov/resources/caseload/

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Tompkins County Recommended Budget • Sept. 15th 2020

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• Family Assistance

(TANF) cases continue to decline

• Continue with

downward trend since 2008

• No local cost (or

savings)

• 5 year life time

eligibility

http://otda.ny.gov/resources/caseload /

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Tompkins County Recommended Budget • Sept. 15th 2020

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• Safety Net cases remain

25% above January 2008 (pre-recession)

• Indicates that the vast

majority of new applications submitted during the pandemic have been for SN households not TANF

• 71% local funding/ 29%

NYS

http://otda.ny.gov/resources/caseload /

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Tompkins County Recommended Budget • Sept. 15th 2020

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Major Budget Drivers

• Revenues
• Sales tax
• Tax base
• Casino revenue
• Expenditures
• Capital Program
• Labor Costs
• Unfunded

Mandates

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Tompkins County Recommended Budget • Sept. 15th 2020

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Sales Tax

• Average annual sales tax growth has been approx. 2.0% for past decade
• 2.5% for prior 15 years
• Exception:
• -6.07% (2009)
• -2.17% (2015) & -.55% (2016)
• 2017- growth of 6.51%
• 2018 – growth of 5.41%
• 2019 – growth of 4.13%
• 2020 – est. decrease of -14% to 2019 actual

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Tompkins County Recommended Budget • Sept. 15th 2020

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• 2021 Recommended

Budget includes 8.9% decrease compared 2020 budget.

• There is no precedent

for predicting future sales tax.

• Unemployment and

economic recovery will determine how quickly sales tax recovers.

Sales Tax Projections

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Tompkins County Recommended Budget • Sept. 15th 2020

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Sales Tax

• Comparison of Jan. – Aug. to 2019: -14.6%.
• $951,000 of State diversions takes away County sales tax
• $564,000 Distressed Hospital Fund
• $387,000 AIM aid
• Economic recovery is unpredictable.

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Tompkins County Recommended Budget • Sept. 15th 2020

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• 3.87% growth in tax

base over last year

• 17.1% growth in tax

base over past five years

• 33.5% growth in tax

base over past 10 years

• Robust growth allows

cost of gov’t to be spread across larger base

Taxable Assessed Value

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Tompkins County Recommended Budget • Sept. 15th 2020

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Casino Revenue

• 2018 – 1st time in Budget
• Revenue from Tioga and Del Lago
• 2018 Del Lago experienced bond downgrade & 2019 ownership changes
• 2019 Actual - $2.035 million
• January – July collections of $420,000 – both casinos have been closed since

March.

• August casino’s were allowed to open at 25%
• 2021 budget is $835,000 or 55% less than 2020

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Tompkins County Recommended Budget • Sept. 15th 2020

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State Aid

• State is experiencing liquidity issues
• Withholding up to 20% of State aid in certain instances
• State is waiting for Federal Relief bill to provide financial relief

due to pandemic

• Governor has indicated that if Federal Relief is not passed,

municipalities may experience a 20% cut in State aid, possibly more.

• 20% cut = $5.1 million

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Tompkins County Recommended Budget • Sept. 15th 2020

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Workforce

• Proposed budget reduces workforce by 47 FTEs, or 6%
• Nearly 2/3 of departments experienced reductions in staffing
• 18 employees have been offered other positions in the
• rganization resulting in no layoffs

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Tompkins County Recommended Budget • Sept. 15th 2020

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Labor Cost

Wage Growth

• Blue Collar agreement in place for 2021
• Budget assumes settlements within parameters
• Work item of 2021 is to get labor contracts with other units

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Tompkins County Recommended Budget • Sept. 15th 2020

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Labor Cost

Fringe

• Healthcare premiums up 5%, but changes in retiree healthcare

and decreases in # positions provided for a $250,000 decrease in health insurance costs

• Pension contribution was up $256,000
• Overall fringe is only up $45,000 or 1%

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Tompkins County Recommended Budget • Sept. 15th 2020

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Mandates

• Human Service mandated expenses increased $490,000 or

2.26%

• Expected increase in Safety Net = $947,000
• Reduction on Foster Case aid = $800,000
• County assumes 100% of CPL 730 = $360,000
• Increase eFMAP aid will reduce weekly Medicaid shares for the

year = $1.38 million

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Tompkins County Recommended Budget • Sept. 15th 2020

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Sponsored & Partner Agencies

• 12% decrease in baseline budgets.
• Plus $344,250 in one-time OTR support for Agencies.
• TC3 total contribution stayed flat, Tompkins share decreased by

$48,000.

*Sponsored Agencies: Cornell Cooperative Extension, TCAD, TCAT, TCPL, Rural Libraries, Soil & Water, The History Center, Human Services Coalition and Agencies, TCAction, SPCA, Recreation Partnership

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Tompkins County Recommended Budget • Sept. 15th 2020

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Contingency

• $900,000 – consistent with prior year base line contingent

budget and expenditures

• $1,000,000 – of additional contingent fund in anticipation of

cuts in State aid or increased unfunded mandates

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Tompkins County Recommended Budget • Sept. 15th 2020

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Capital Reinvestment

• Capital Plan proposes provides a financial strategy to achieving

net-zero emissions by 2040.

• Recommends $770,000 or 11% decrease in.
• Proposes using $8 million in fund balance and capital reserves
• ver next several years.

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Tompkins County Recommended Budget • Sept. 15th 2020

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• Designates $30 million

for Green Facility improvements.

• Assumes $28 million for

downtown campus.

• Additional $4 million for

public safety building improvements.

• $6 million committed to

cover airport improvements.

• $6.5 million for back up

dispatch center and system upgrades.

• $1.75 million to

electrify our passenger fleet.

Capital Expense v. Capital Funding

Cumulative balance in capital fund includes $8M transfer from GF unassigned fund balance/Capital Reserves.

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Tompkins County Recommended Budget • Sept. 15th 2020

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Fund Balance Policy Update

• Fund balance projecting

is subject to change – a snap shot in time.

• Assumptions do not

consider current year shortfall.

Amount FB as % of Rev. As of 12/31/19 Unassigned FB 46,215,923 $ 24.4% 2020 One-time/Rollover (1,870,000) $

• 1.0%

2020 Shortfall (est) (5,500,000) $

• 2.9%

Proposed 2021 Transfer To CF (2,750,000) $

• 1.5%

Proposed 2021 One-time OTRs (1,242,376) $

• 0.7%

Proposed 2021 Rollover (est) (640,754) $

• 0.3%

2021 Year-End 34,212,793 $ 18.1%

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Tompkins County Recommended Budget • Sept. 15th 2020

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Airport

• Operations remain flexible with upcoming changes
• Customs facility online, airline changes, COVID impacts
• Budget is proposed with $324,000 operating loss
• Uses $84,000 of fund balance & $240,000 of CARES Act aid to balance budget
• $165,970 of new cost for customs facility
• $13 million local BAN to complete project
• Est. $3M in Passenger Facility Charges (PFCs)
• NYSEG award pending ($1.5M)
• CARES Act funding = $1.8 million (less operating uses)
• $6M has been included in Capital Program as local cost

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Tompkins County Recommended Budget • Sept. 15th 2020

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Recycling & Materials Management

• Budget recommends $5 per unit increase in solid waste fee – from

$60 to $65

• Budget is proposed with $89,000 operating loss
• Uses $89,000 in fund balance to balance budget
• Significant improvement over 2020 budget
• 2020 projected to finish year with no operating loss
• Continued concerns over recycling industry
• 2020 Request for Proposal (RFP) submittal currently being reviewed

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Tompkins County Recommended Budget • Sept. 15th 2020

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Risks

• Sales tax
• State Aid
• Public Assistance
• Enterprise Units

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Tompkins County Recommended Budget • Sept. 15th 2020

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Tax Cap

(Assumptions)

• Tax Cap Estimated at .88% = $449k
• Large roll over from last year = $687k
• Sales tax credits to Town’s decreased significantly - $1.57M

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Tompkins County Recommended Budget • Sept. 15th 2020

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Approach to 2021 Budget Review

• 4.97% levy increase
• No lay offs despite 47 FTEs (6%) reduction in workforce
• Supports Capital Program
• Watch State aid closely
• Economic recovery will drive sales tax growth

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Tompkins County Recommended Budget • Sept. 15th 2020

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Average Tax Bill

($200,000 median in 2021, $190,000 in 2020)

Questions?

Deborah Slesinski

Budget Director Orange County Government dslesinski@orangecountygov.com

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Tompkins County Administrator Jason Molino Jmolino@Tompkins-co.org www.TompkinsCountyNY.gov

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NYSAC Thanks our Workshop Sponsor:

https://aarauctions.com/tax-foreclosure-auctions/?utm_source=Conference&utm_medium=banner&utm_campaign=NYSAC

County 2021 Budget Challenges• Sept. 15th 2020

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