County: FY2019-2020 Budget Fared Well

County CFO Don Warn says of overall COVID sales tax losses, “I would love to tell you that ... but my prediction though - I don’t know.”

Asheville – Buncombe County’s Finance Director Don Warn presented the commissioners with an unaudited fourth-quarter report showing the county fared well, at least through June 30, through the economic shutdown. Revenues were $379.6 million, or 0.24% more than was budgeted. An additional $14.79 million was appropriated from the general fund balance. 

Reasons for the good performance were typically the net of lower operating costs with less provision of services offsetting reduced revenue streams. In some ways, COVID-19 proved profitable financially for the public sector, if not otherwise. For example, the county spent more on providing COVID-19 relief, but regular programming for social services was largely suspended. And, while everyday collections from sources like ambulance fees and rentals were down, more income was collected from special responses to the situation, like housing federal prisoners and a Medicaid Cost Settlement.

Sales taxes were expected to be abysmal, but that was not the case at all. While ad valorem sales tax collections were actually slightly higher than expected, revenues from the local option sales tax came in only $1 million short of budgeted amounts, or 3.2% lower. The county actually collected more from permits, fees, and investment earnings, but Warn cautioned losses in the latter category will show up in later quarters. Receipts increased from excise taxes and heavy equipment rentals, corresponding with anecdotal claims that alcohol consumption and construction were booming during the worst of the shutdown. Miscellaneous sources with significant budgetary impact included renewable energy credits, proceeds from a legal settlement pertaining to corruption in former county administrations, and high-performance investment earnings.

Expenditures fell across categories, leaving overall expenditures 4.25% less than the $393,466,352 budgeted. But Warn had another word of caution: a lot of last year’s savings were from deferred expenditures–such as training, maintenance, and upgrades–that will need to be addressed in subsequent budgets. Among the savings were substantial decreases in employee benefits, primarily due to vacancies at the Detention Center and in the Social Services, Information Technology, and Public Health departments. The county could, however, pocket savings from utilities, travel, contract labor, and program support. Schedules for economic development incentives with payments due last year will merely slide one year into the future. In sum, the county can roll $2,558,016 in savings into the current year’s budget.

Chair Brownie Newman suspected it was all the people stuck at home with nothing better to do than clean the place up that resulted in the landfill’s great performance. The Solid Waste Fund, which is operated like a business outside the general fund, saw revenues of $11.45 million, which were 12.1% overbudget. The savings were compounded with expenditures 15.5% underbudget, about half of which constitutes maintenance which will have to be addressed at some point.

Another fund considered separately from the general fund is the Capital Improvement Plan. The county only spent 31.7% of the $8.4 million budgeted for projects this year. Deferred construction expenditures and vehicle purchases will, of course, be rescheduled with modifications to the county’s long-term capital improvement plan.

After a break for public comment, Warn supplied the commissioners with a first-quarter report for the current fiscal year. The gist of the presentation was that it was too early to make projections, as government revenues and expenditures are not pay-go but come in more toward the end of the year. Amounts to date were running around 10%-12% of budgeted amounts, which is not atypical. An exception would be the Solid Waste Fund, where, already at 28.9% of budgeted amounts, Warn said activity, and therefore revenues, were going “gangbusters.” In reply to Commissioner Al Whitesides, Warn said he had no idea how sales tax revenues were going to fare for the rest of the year.

In Other Matters –

The commissioners unanimously approved committee recommendations for funding $1,293,811 in affordable housing projects. A total of eleven agencies had requested funding totaling $2,175,817, but three projects were deemed ineligible. One loan, in the amount of $484,312, was given to Jasper Apartments, and represents the third loan the project has received from the county. The other awards were grants that supported rental assistance through Eblen Charities and Eliada Homes, emergency home repair through Habitat for Humanity and Mountain Housing Opportunities, home repair through PODER, design costs for Eliada Homes, and renter education through OnTrack. A lateral entry receiving funding was the county’s Employee Housing Assistance Benefit Program, which will receive $40,000. The committee remains in negotiations for spending the balance in the account.

Commissioner Anthony Penland asked what was being done to help the elderly stay in their homes, and presenter Matt Cable said the elderly were a target population and constituted a significant portion of recipients of home repair grants, which typically consist of things like ramp construction or roof repair. Commissioner Amanda Edwards said children also should be a target population for housing because safe, warm shelter helps promote priorities the commissioners are stressing with their emphasis on early childhood education. Newman said those he knows in the real estate business say a lot of people are continuing to relocate in the area, and that is contributing to scarcity in an already tight market.

In good news, Commissioner Joe Belcher announced that following their last meeting, when an out-of-cycle request for funding was made for an Enka High School Barn, somebody made a $30,000 pledge. The barn would support the Future Farmers of America and animal sciences education programs, and school barns are not an unusual feature in rural school districts.

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