Nuts & Bolts of the COUNTY BUDGET

INITIATION & CONTINUING EDUCATION NOVEMBER 2014 Kristina Glascock & Mary Lou Hansen

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Areas that we will cover

Who’s budget is it?

    Who is responsible for the budget?

Role of the County Auditor Role of the County Commissioners (BOCC) Role of other elected officials   Budget cycle Budget content    Budget processing Financial reporting Fraud  Miscellaneous

WHO’S BUDGET IS IT?

 The budget is basically a document that sets county priorities by the allocation of funds  Every elected official has a role in this document

Who is responsible for the budget?

Every elected official & department head!

 Commissioners       Clerk/Auditor Assessor Coroner Prosecuting Attorney Sheriff Treasurer         

BOCC

Planning & Zoning Road & Bridge Noxious Weeds/Parks Computer Services Probation/Public Defender/Detention County Agent Emergency Services Custodial/Maintenance Etc.

Role of County Auditor (Clerk)

     Under Idaho Code 31-1602, County Auditor shall be the budget officer Responsible for compiling revenue projections and expenditures Shall be the Auditor’s duty to see that the provisions thereof are complied with Prepare and submit a proposed budget to BOCC. I.C. 31-1603 Prepare proposed budget and publish in newspaper. I.C. 31-1604

Role of the Board of Commissioners

 Meet with County Auditor to assist with financial planning  Best practice: Meet with each department head to review budget and discuss revenue  Hold public budget hearing. I.C. 31-1605 (Any taxpayer may appear and be heard upon any part or parts of said tentative budget)  Adopt budget by Resolution

Role of Other Elected Officials

 Provide budget requests and revenue estimate to Auditor (in a timely manner or a penalty of up to $50 fine I.C.31-1602)  Provide justification for requests  Attend public budget hearing to answer any questions if called upon I.C. 31-1605  Work with Auditor if have any unusual expenses or windfalls, throughout the entire year

Budget Cycle

 Newly elected, but inherit someone’s else budget. (study and understand it before determining to……….fix it next go around)

Budget Cycle

   Step 1: Auditor will notify in writing each Elected Official & Department Head to submit itemized revenue & expenditures for the budget on or before the 1 st Monday in May Step 2: EO’s & Department Heads file their preliminary budget with the Auditor by the Third Monday in May Best Practice: BOCC & Auditor should meet with Department Heads to review requests and gather input

Budget Cycle Cont.

   Step 3: Auditor due date to submit recommended budget to BOCC is First Monday in August. I.C. 31 1604 Step 4: Auditor must publish tentative budget not later than the third week in August and notice public budget hearing. This must include two previous years actual amounts expended and current fiscal year divided into three categories: salaries, benefits & other (31-1606).

Remember once published, it can only be reduced

Budget Cycle Cont.

 Step 5: Public Budget Hearing is held on or before the Tuesday following the first Monday in September (usually the day after Labor Day,

so much for a long weekend

)!

 This is the time for public input. The hearing could last the length of time it takes to open and close the public hearing, or hours of public input. Good luck to all!!!

   The hearing maybe continued from day to day, but must be concluded by the 2 nd Monday in September (31-1605) Budget can not increase once published BOCC adopts budget by resolution

Budget Cycle

 Fiscal year ends September 30 th and the new one begins October 1 st . (different than the State of Idaho and the calendar) I.C. 31-1601.

 Cash basis resolution needed to authorize counties to accumulate fund balances & carry them to the next fiscal year. I.C. 31-1605A

Budget Content-Revenue

 Property tax       State sales tax State Election Funds State Liquor funds PILT (Payment in Lieu of Taxes) Highway User revenue Motor vehicle   Drivers license Boat & snowmobile          Licenses & Permits Replacement Funds Court revenues Fees for services 911 fees Grants Indigent reimbursement Interest Etc.

Budget Content-Revenue

 Estimating new fiscal year’s revenue  Calculate per month revenue  Review prior years actual revenue (conservative)  Be aware of timing of revenue-i.e. quarterly receipts; tax collections  Estimate revenue for the remainder of the current year  Estimate current year & add percent increase  Carryover (Remaining Cash)

Budget Content-Revenue

 Property Tax  3% cap (I.C. 63-802)  New construction  L-2  Levy limits each fund  Foregone amounts  Annexation  Certification (for other taxing districts)

Budget Content-Revenue

  Restricted revenue (can only be used towards)  Highway user  Court revenue  Snowmobile/Waterways  911 fee  Election Funds Unrestricted revenue  PILT   Sales tax Replacement Funds (Ag & Per Prop)  Property taxes (within statutory limits)

Budget Content-Funds

              General or Current Expense Airport Ambulance Ad Valorem (Revaluation) Justice Ignition Interlock District Court Election Consolidation Fair Grounds and Buildings Health District Historical Society Charity (Indigent) Trusts Drug Court               Road & Bridge Community College Parks & Recreation Pest Control Snowmobile Solid Waste Tort Veterans’ Memorial Waterways Noxious Weed 911 Emergency Comm EMS Enterprise Funds Etc.

Budget Content-Expenses

 What are “A” and “B” budgets?

 A budgets are salaries & wages  B budgets are everything else  C budgets (not always used) are capital expenses  D budgets are payroll taxes & benefits

Budget Content-Expenses

 How to determine employee raises?

 Straight percentage across the board  Set dollar amount across the board  Step & grade system or market longevity system   Distribute a set dollar amount for Elected Officials & Department Heads to handout as merit Make it equitable & don’t get sued

Note: Salaries are set by BOCC

I.C. 31-3106

Budget Content-Expenses

 What about employee benefits?

 Health, accident, & life insurance  Vacation, sick leave & personal holiday  PERSI   Social Security Worker’s Compensation  Unemployment

Budget Content-Expenses

 What about supplies?

 Review the previous years  U.S. Communities-NACO.org

 Plan for the unexpected (within reason)  Association dues  Know what you can afford

Budget Content-Expenses

 What about other expenses?

      Typically BOCC set a threshold for pre-approval, whether it is $500 or $5000 that is a policy decision Officials are personally liable for unauthorized purchases I.C. 31-1607 (exceed appropriation) Be aware of when revenues are received Check not only if budgeted but if there is revenue Large expenditures? Auditor needs to communicate with Treasurer to be sure funds are available Public purpose allows BOCC to contribute to private, non profit groups. I.C. 31-866

Budget Content-Expenses

 What if a budget looks like it will be overdrawn?

 Open budget and make adjustment in public hearing with proper notice I.C. 31-1605  Misdemeanor if go over I.C. 31-1607

RESOLUTION NO. 06-03-10 THE BOARD OF COUNTY COMMISSIONERS CLEARWATER COUNTY, IDAHO

WHEREAS, on September 6, 2005, the Clearwater County Commissioners adopted the 2005-2006 fiscal year budget for Clearwater County, and WHEREAS, there have been higher than anticipated costs in the Sheriff’s Budget for mental holds, and WHEREAS, there is money budgeted in the Justice-General Reserve account to cover unanticipated costs in the Sheriff’s Budget.

NOW THEREFORE, on motion duly made, seconded and unanimously carried, IT IS RESOLVED, that the Clearwater County Auditor is hereby ordered to transfer the sum of Twenty Thousand Dollars ($20,000) from the Justice-General Reserve Budget (08-29-499-00) to the Sheriff’s Budget (08-04-596-06) to cover the increased costs for mental holds.

DATED and DONE this 6th day of March, 2006.

______________________________ Don Ebert, Chairman ATTEST: ______________________________ Stan Leach, Commissioner ______________________________ Robin Christensen, Clerk ______________________________ J. Pete Curfman, Commissioner

Budget Content-General Reserve

 What is a general reserve?

 BOCC has right to make general reserve appropriations, not to exceed 5% of Current Expense and Justice Fund budget. I.C. 31-1605  This may be used in the event of unforeseen contingencies requiring money not placed in the budget to be expended. Requires unanimous vote of BOCC.

RESOLUTION NO. 06-09-30 THE BOARD OF COUNTY COMMISSIONERS CLEARWATER COUNTY, IDAHO

WHEREAS, on September 6, 2005, the Clearwater County Commissioners adopted the 2005-2006 fiscal year budget for Clearwater County, and WHEREAS, after the budget was adopted, Clearwater County became aware of unanticipated revenue that was not budgeted in the 2005-2006 Clearwater County Budget, and WHEREAS, after the budget was adopted, there were unanticipated changes that needed to be made in the 2005-2006 fiscal year Clearwater County budget, and WHEREAS, pursuant to Idaho Code 31-1605, the county has the authority to re the current fiscal year, and open it’s budget if unanticipated revenue will be received so that it can be expended by the county during WHEREAS, on September 11, 2006, Clearwater County did hold a public hearing to consider re-opening the 2004-2005 fiscal year budget to include unanticipated revenue and to make needed adjustments in budget amounts, NOW THEREFORE, on motion duly made, seconded, and unanimously carried, IT IS RESOLVED, that the Clearwater County Auditor is hereby ordered to open the 2004-2005 Clearwater County Budget to show unanticipated revenue in the amount of Seven Thousand Five Hundred Dollars ($7,500) to the Sheriff’s Justice Fund. This money was received from the Nez Perce Tribe to help defray the impact of rising fuel costs to the Clearwater County Sheriff’s Office DATED and DONE this 11th day of September, 2006.

Budget Processing

 Who is responsible for the bills?

 EO or Department Head submits claim to Auditor  Auditor reviews the claims for budget compliance and flags specific claims for the BOCC  BOCC review & approve claims  Best Practice is to review summary sheet of bills & look at actual receipts (including credit card statements)

Budget Processing

 What expenses are not allowable?

 Alcohol with dinner  Work done on driveway  Pay relative  Use county resources for personal expense  Clothing for work (is it required? – county credit card can’t pay for standard clothing items)  Mileage to and from work  Best Practice: Gifts for employees or others??

Budget Processing

 Can you transfer money?

 If fund becomes inoperative for its purpose, then the BOCC may have the Auditor transfer to whatever fund they deem best. I.C. 31-1508

Budget Processing

 What if we have an emergency? I.C. 31-1608  Must be caused by fire, flood, explosion, storm, epidemic, riot, or for the immediate preservation of order, prosecution of crime, etc.  Must have unanimous vote by BOCC and may use any money on hand in the county treasury, if insufficient money use registered warrants

Budget Processing

 What is a registered warrant?

 A warrant is an order drawn by the BOCC directing the Treasurer to pay specified amount to a person     I.C.31-1510 defines a registered warrant as a warrant drawn on a fund which has insufficient funds to pay the amount Once BOCC determines it is necessary to register warrants; adopt a resolution by unanimous vote, establishing an emergency Resolution should be reviewed by Prosecutor and an opinion letter stating resolution is proper and the purpose of warrants are necessary County Treasurer contacts banks about available interim financing options and reports to BOCC

Budget Processing

 BOCC directs Auditor to establish Warrant Redemption Fund  Next fiscal year levy specifically for Warrant Redemption Fund. I.C. 63-806  Can also transfer from other funds to avoid the need or offset the levy amount for the Warrant Redemption Fund

Budget Processing

What is a Tax Anticipation Note (TAN)?

A TAN is an advance of funds against the collection of future property taxes on a levy already made. Usually necessary in early months of fiscal year or just prior to January or July tax turnover.

Treasurer contact lenders for rate quote.

May be possible to borrow from other funds as allowed by I.C. 31-1507 to avoid TAN.

Financial Reporting

The purpose of financial reporting is to communicate and keep the elected officials informed as well as the public.

Each official has a fiduciary responsibility to safeguard public money.

Financial Reporting

 What is GASB?

  Government Accounting Standards Board establishes accounting reporting standards at the state & local level. I.C. 31-1509 GASB’s purpose is to assist governing bodies to evaluate their operation and provide the public with easier to read reports due to the standardization of reporting.

 Each department must keep track of all assets/inventory according to your county policy.

Financial Reporting

 The County Auditor is required to prepare quarterly financial reports I.C. 31-1611  BOCC must have an audit performed by outside auditors. I.C. 67-450B  Other audits by outside entities   Waterways/Snowmobile Grants   PERSI Workers Comp.

Financial Reporting

 Legislative Services (all governmental entities)  Court Financing Report  Waterways Report  Annual Highway Report  U.S. Census Reports  Grant Reporting  IAC Survey (wages)  IAC Survey of information for Legislature   Payroll: quarterly, annual, W-2, 1099 IAC’s NUMEROUS Requests!!!!!!!!!

Financial Reporting

 Fund Balances  Three months of operating costs  Some funds have limits of amount of fund balance (for example District Court I.C. 31-867)

Fraud

 Credit cards (I.C. 18-5701 misuse of public $)  Borrowing lunch money from cash drawer  Petty cash  Pocketing cash as it comes in  Accounts payable-fake invoices or companies  Double billing

Miscellaneous

 Can we legally sell county property?

 Tax deed sales require specific due process by tax collector. I.C. 31-808, 63-1005 & 63-1006  Surplus property (not exceeding $250) may be sold without notice to the public. Otherwise, public notice must be given in the newspaper and public auction held can use internet.

 BOCC can transfer to another taxing district or a nonprofit if declared in the public interest.

Miscellaneous

 What is an Urban Renewal District? I.C. 50-2001  The purpose is for infrastructure improvement for the prevention of development or spread of slums and blight  Allows for cities or counties to create an urban renewal agency.

 This entity receives the value of new growth within their district boundaries and other taxing districts do not receive that value until the end of the plan or 24 years

Miscellaneous

 What is a LID?

 Local Improvement Districts are created to improve sidewalks, streets, sewers, and utilities.

 A petition of the residents is presented to the BOCC and then bonds are issued after following all the procedures. I.C. 50-1701 through 50-1770

Miscellaneous

 How to handle grants  Best Practices: Advise BOCC & Auditor of a potential grant application, which the BOCC approves  Once a grant is awarded by funding agency, BOCC accepts it  Auditor is the financial officer (budget may need to be open for unforeseen revenues)   Most granting agencies audit to ensure that money is spent according to the grant Grant timing might not follow county’s fiscal year  Be aware of matching requirements (ongoing requirements such as county funding newly created positions under the grant)