[Business Communication]
Board Work Session December 3, 2014
Quick Recap
Panel Discussion
Brief Overview
CIP financing options, including General Obligation Bond Referendums Service Districts Inflation adjusted wages
Board Reflection/Discussion
Next Steps
Shared Understanding: basic facts, clarified assumptions, processes, needs
Mandates and Obligations: recognize as continuing challenge
Compensation and Benefits: maintain compensation in accordance with our identified market/commonality
Implementation of Strategic Plans: make progress towards goals
Physical Infrastructure: addresses community needs and priorities.
Changing Demographics: positioning ourselves to be proactive
Prevention: identify trends/proactive strategies
Public Engagement/Involvement: engage the public in long-range financial planning processes.
Fiscal Responsibility: provide quality services within a reasonable tax obligation for county residents, aggressively pursue additional resources that do not rely on real estate taxes.
Staff Capacity: provide adequate staff capacity across all functional areas
Staff presented two scenarios for consideration
What it does: Provides funding for operating mandates/obligations Provides for increased costs associated with Health Care Provides full year of funding for those positions funded before or in FY 15
However, it … Fails to provide market salary increases for existing staff over the five year period Fails to provide any additional staffing to meet current needs nor those associated with population/enrollment growth At current tax rate, does not support our CIP, as currently adopted ▪ Reduces Plan by $70M over Five Years, maintenance reduced/deferred, Can not include Transportation Revenue Sharing, Pantops Fire Station, School Security Improvements, ACE, and the Courts projects would likely have to be reduced.
Does not adequately support core agencies nor provide any increases to ABRT or
Cultural Agency funding categories
Funding Gap
FY 16
FY 17
FY 18
FY 19
FY 20
$8.1M
$13M
$16.7M
$21.9M
$26M
Aligns with Board and School Board Guiding Principles Funds all mandates and obligations outlined in Scenario 1 Provides salary increases for employees within HR’s recommended range to keep up with Market Assumes dedicated 3 penny tax rate increases in out years to support CIP Provides more adequate funding levels for agencies Provides funding to begin addressing current service level needs and staffing shortages Provides staffing to keep pace with anticipated population and enrollment growth over the five year period.
Funding gap if no dedicated tax increases for Capital
FY 16
FY 17
FY 18
FY 19
FY 20
$8.1M
$15.5M
$21.9M
$27.3M
$31.5M
Long-term Quality of Life items, such as: •
Master Plan implementation, regional transit increases, ecosystem protection, solid waste recycling services, rural area planners, School Division initiatives, capital projects such as Woodbrook Elementary School Modernization, Fire Rescue Training Facility, Police Training Academy, Athletic Field Improvements, new parks, etc.
Functional Area
FY09: 655 positions FY15: 668 positions FY 20: “Catch Up” 709 positions FY 20 “Keep Up” 761 positions
Staff in FY09
Staff in FY15
Staff by FY 20
Staff by FY 20
“Catch Up”
“Keep Up”
Health & Welfare
118
128
137
150
Public Safety
233
265
288
316
Judicial
44
45
45
46
Administration
107
104
107
112
Public Works
39
33
35
39
Parks, Recreation and Culture
22
20
21
21
Community Development
92
73
76
77
Robyn Bolling , Principal, Greer Elementary
School Kathy Ralston, Director, Department of Social
Services Dan Eggleston, Chief, Fire and Rescue Steve Sellers, Chief, Police Department
School Division Assumptions: Enrollment
School Division Free/Reduced Lunch Student Increases Over Time (Economic Need) +14.87%
+6.31%
+3.84%
+12.04%
Percentages indicate growth in F/R lunch numbers from year to year.
+1.36%
School Division English as a Second or Other Language (ESOL) Student Increases Over Time
+1.28%
+1.36%
+0.96%
+5.98%
Percentages indicate growth in ESOL numbers from year to year.
+7.53%
School Division 5th Grade Cohort, 2014-15
-118
-92
-64
-36
Minuses indicate decrease in original cohort members from year to year.
-34
A Few Facts About Greer Elementary, 2014-15 Student Demographics
New Students Students Leaving After 1st After 1st Day of Day of School School
Student Enrollment, PK-5
601
ESOL Students Served
223
Refugee Students Served
46
Homeless Students Served
27
PK
4
3
Families in Shared Housing
30
K
17
6
1
22
15
2
9
12
3
13
4
4
13
5
5
11
4
TOTAL
89
49
Economically Disadvantaged
76.6%
Intervention/Enrichment Tier 2 Students Served
94
Tier 3 Students Served
44
Gifted Learners Served
23
Grade
30 Languages Spoken by 2013-14 Greer ESOL Students
“Other” represents 23 languages.
•
2008 as benchmark – What has changed? – Increased caseloads – Increased mandates
•
Workload Measures since 2008 – 23.3 positions understaffed – Average worker is working at 163% of recommended capacity
•
Impact – Overtime – 94% increase between 2009 and 2014 – FMLA & Sick leave – lost work days – Turnover (8% in 2008 to 13.51% in 2014) – KPI’s – Families (risk) – Spillover to other departments
•
What is driving the increases? – Poverty – Increase in aging population – Affordable Care Act/FAMIS – 2008 Recession – Multi-Cultural changes – Population – Urbanization – Children’s Transformation & Best Practices (Casey Family Programs) – Training
What’s on the horizon
ACA enrollment – year two Transition of cases into new automated system Increased requirements for visits APS Right to Review Adoption assistance requirements New Court plans requirements Foster Futures program Foster Care to 21 CSA funding changes Federal changes to SSBG Emergency Disaster sheltering SNAP participation rate
Stories of success
5 Year Plan – Driving Factors
Financial Benchmark Peer Counties
Prevention Fire Inspections Inspections Staffing
Inspections Staffing
StaffingInspections
- $164
James City Roanoke Hanover Stafford Spotsylvania Albemarle
$120
$3.2 M
Cost/Capita
5 Year Plan – Driving Factors
Financial Benchmark Peer Counties
Prevention Fire Deaths/100k Pop
Training & Leadership Development
60%
- $164
1.09
Turnover of Volunteer Chiefs
2.00
James City Roanoke Hanover Stafford Spotsylvania Albemarle
$120
$3.2 M
Cost/Capita
Training
XX
Pantops Fire Rescue Station • • •
High risk area Large call volume Gap in coverage
F
Pantops Fire Rescue Station F
• • •
F
F
F
F F
High risk area Large call volume Gap in coverage
Average Police Department Staffing Levels •Nationwide 2.51 Officers per 1000 Population •Virginia 2.27 Officers per 1000 Population •Virginia County Police Departments 1.6 Officers per 1000 Population •Albemarle County 1.2 Officers per 1000 Population
*Through 12/01/2014
Debt financing is a critical and necessary element of our Capital Improvement Program. County staff estimates that more than 70% of the funds required for the 5 year CIP will be acquired through debt financing.
The County has a number of financing options available to facilitate the funding of the Capital Improvements Program, including: Collateralized Lease/Revenue bonds Uncollateralized Lease/Revenue bonds VPSA pooled bond financing General Obligation Bond Financing by Referendum bank-qualified financing; others
A General Obligation Bond approved through Referendum results in the best interest rate since the issue is backed by the full faith and credit of the public;
Lease/Revenue Bond, with collateral, result in a “notch” below the AAA rating (approximately 50 basis points, or 5/10 of 1%) due to the risk of nonappropriation; and uncollateralized Lease/Revenue issue would be two notches below the AAA rate;
The difference in issuance costs between a General Obligation Bond and a Lease/Revenue issue are considered immaterial.
Unlike other forms of debt financing, a General Obligation Bond approved through Referendum allows the general public to decide if a project, or collection of projects are to be funded, with an understanding of the required tax rate increase necessary to support the projects.
Can be created by any locality, or any two or more localities, by ordinance
Require a specific boundary
Provide additional, more complete, or more timely services of government than are desired as a whole
Can include services specifically authorized by statute. These include sidewalks, economic development, promotion of business and retail development services, beautification, control of infestations of insects, refuse collection, and sponsorship and promotion of recreational and cultural activities
Not intended to be a separate funding source for governmental services that benefit the entire locality, nor to be a replacement funding source for existing general services.
Jurisdictions can annually levy a tax on the assessed value of all real property within a district to support these services provided in the district. taxes must be kept separate and expended on those identified services.
While not a service district, the county could also establish a Fire EMS zone, in which the County can levy a tax within the district to provide Fire and EMS services within that district.
Over the past five years, County employees’ net wages have been basically flat, due to contributions to VRS, increases in medical insurance premiums, and tax withholding adjustments
After adjusting for inflation, there has been a 6.3% decrease in real wages since FY 10
Chart based on an employee who had a $50,000 annual salary beginning in FY 10 and is enrolled in the County’s employee/family basic medical plan
Albemarle County’s private sector’s inflation-adjusted average weekly wage increased by 1.71% between CY 2009 and CY 2013
This information does not include possible changes in employees’ health care costs or other adjustments over these years that may affect net pay. Sources: Virginia Employment Commission (VEC) Quarterly Census of Employment and Wages and U.S. Bureau of Labor Statistics
Compensation • Classified staff • Target median of our adopted market • Teachers • Target bottom of the top quartile of our adopted market Benefits • Slightly above adopted market benefit levels Who is the County’s Adopted Competitive Market? • Cities, Counties and School Districts and certain local private employers, such as Martha Jefferson and UVA Medical Center for clerical and administrative positions.
Given your understanding of the Five Year Financial Plan situation and your feedback from the community to date, what are your thoughts/reflections at this time regarding the most important priorities over the five years of the plan?
What are your thoughts about the strategies the County (Schools and General Government) should consider/explore to address the funding gap? •Convince state and federal legislators to adequately fund their obligations and mandates • Permission from our state legislators for the same taxing authority as cities currently have •Economic Development Investments that increase current revenue streams •Permission from Albemarle County citizens to use Bonds for Capital Improvement Needs •Special tax districts for services that benefit only certain areas of the County •Partnerships with others to share expenses •Scale back expectations or reduce services if revenue growth doesn’t cover core needs •Increase the property tax rate •Others?
December 10 BOS Work Session Five Year Financial Plan Complete
BOS and School Board Joint Work Session CIP
Superintendent’s Recommended Budget January 15
January 29
Superintendent Presents Recommended Budget to School Board
Public Hearing on Recommended School Division Budget
County Executive’s Recommended Budget February 19
February 23
County Executive Presents Recommended Annual Budget to BOS
Public Hearing on County Executive’s Recommended Budget
Quick Recap
Panel Discussion
Brief Overview
CIP financing options, including General Obligation Bond Referendums Service Districts Inflation adjusted wages
Board Reflection/Discussion
Next Steps
Shared Understanding: basic facts, clarified assumptions, processes, needs
Mandates and Obligations: recognize as continuing challenge
Compensation and Benefits: maintain compensation in accordance with our identified market/commonality
Implementation of Strategic Plans: make progress towards goals
Physical Infrastructure: addresses community needs and priorities.
Changing Demographics: positioning ourselves to be proactive
Prevention: identify trends/proactive strategies
Public Engagement/Involvement: engage the public in long-range financial planning processes.
Fiscal Responsibility: provide quality services within a reasonable tax obligation for county residents, aggressively pursue additional resources that do not rely on real estate taxes.
Staff Capacity: provide adequate staff capacity across all functional areas
Staff presented two scenarios for consideration
What it does: Provides funding for operating mandates/obligations Provides for increased costs associated with Health Care Provides full year of funding for those positions funded before or in FY 15
However, it … Fails to provide market salary increases for existing staff over the five year period Fails to provide any additional staffing to meet current needs nor those associated with population/enrollment growth At current tax rate, does not support our CIP, as currently adopted ▪ Reduces Plan by $70M over Five Years, maintenance reduced/deferred, Can not include Transportation Revenue Sharing, Pantops Fire Station, School Security Improvements, ACE, and the Courts projects would likely have to be reduced.
Does not adequately support core agencies nor provide any increases to ABRT or
Cultural Agency funding categories
Funding Gap
FY 16
FY 17
FY 18
FY 19
FY 20
$8.1M
$13M
$16.7M
$21.9M
$26M
Aligns with Board and School Board Guiding Principles Funds all mandates and obligations outlined in Scenario 1 Provides salary increases for employees within HR’s recommended range to keep up with Market Assumes dedicated 3 penny tax rate increases in out years to support CIP Provides more adequate funding levels for agencies Provides funding to begin addressing current service level needs and staffing shortages Provides staffing to keep pace with anticipated population and enrollment growth over the five year period.
Funding gap if no dedicated tax increases for Capital
FY 16
FY 17
FY 18
FY 19
FY 20
$8.1M
$15.5M
$21.9M
$27.3M
$31.5M
Long-term Quality of Life items, such as: •
Master Plan implementation, regional transit increases, ecosystem protection, solid waste recycling services, rural area planners, School Division initiatives, capital projects such as Woodbrook Elementary School Modernization, Fire Rescue Training Facility, Police Training Academy, Athletic Field Improvements, new parks, etc.
Functional Area
FY09: 655 positions FY15: 668 positions FY 20: “Catch Up” 709 positions FY 20 “Keep Up” 761 positions
Staff in FY09
Staff in FY15
Staff by FY 20
Staff by FY 20
“Catch Up”
“Keep Up”
Health & Welfare
118
128
137
150
Public Safety
233
265
288
316
Judicial
44
45
45
46
Administration
107
104
107
112
Public Works
39
33
35
39
Parks, Recreation and Culture
22
20
21
21
Community Development
92
73
76
77
Robyn Bolling , Principal, Greer Elementary
School Kathy Ralston, Director, Department of Social
Services Dan Eggleston, Chief, Fire and Rescue Steve Sellers, Chief, Police Department
School Division Assumptions: Enrollment
School Division Free/Reduced Lunch Student Increases Over Time (Economic Need) +14.87%
+6.31%
+3.84%
+12.04%
Percentages indicate growth in F/R lunch numbers from year to year.
+1.36%
School Division English as a Second or Other Language (ESOL) Student Increases Over Time
+1.28%
+1.36%
+0.96%
+5.98%
Percentages indicate growth in ESOL numbers from year to year.
+7.53%
School Division 5th Grade Cohort, 2014-15
-118
-92
-64
-36
Minuses indicate decrease in original cohort members from year to year.
-34
A Few Facts About Greer Elementary, 2014-15 Student Demographics
New Students Students Leaving After 1st After 1st Day of Day of School School
Student Enrollment, PK-5
601
ESOL Students Served
223
Refugee Students Served
46
Homeless Students Served
27
PK
4
3
Families in Shared Housing
30
K
17
6
1
22
15
2
9
12
3
13
4
4
13
5
5
11
4
TOTAL
89
49
Economically Disadvantaged
76.6%
Intervention/Enrichment Tier 2 Students Served
94
Tier 3 Students Served
44
Gifted Learners Served
23
Grade
30 Languages Spoken by 2013-14 Greer ESOL Students
“Other” represents 23 languages.
•
2008 as benchmark – What has changed? – Increased caseloads – Increased mandates
•
Workload Measures since 2008 – 23.3 positions understaffed – Average worker is working at 163% of recommended capacity
•
Impact – Overtime – 94% increase between 2009 and 2014 – FMLA & Sick leave – lost work days – Turnover (8% in 2008 to 13.51% in 2014) – KPI’s – Families (risk) – Spillover to other departments
•
What is driving the increases? – Poverty – Increase in aging population – Affordable Care Act/FAMIS – 2008 Recession – Multi-Cultural changes – Population – Urbanization – Children’s Transformation & Best Practices (Casey Family Programs) – Training
What’s on the horizon
ACA enrollment – year two Transition of cases into new automated system Increased requirements for visits APS Right to Review Adoption assistance requirements New Court plans requirements Foster Futures program Foster Care to 21 CSA funding changes Federal changes to SSBG Emergency Disaster sheltering SNAP participation rate
Stories of success
5 Year Plan – Driving Factors
Financial Benchmark Peer Counties
Prevention Fire Inspections Inspections Staffing
Inspections Staffing
StaffingInspections
- $164
James City Roanoke Hanover Stafford Spotsylvania Albemarle
$120
$3.2 M
Cost/Capita
5 Year Plan – Driving Factors
Financial Benchmark Peer Counties
Prevention Fire Deaths/100k Pop
Training & Leadership Development
60%
- $164
1.09
Turnover of Volunteer Chiefs
2.00
James City Roanoke Hanover Stafford Spotsylvania Albemarle
$120
$3.2 M
Cost/Capita
Training
XX
Pantops Fire Rescue Station • • •
High risk area Large call volume Gap in coverage
F
Pantops Fire Rescue Station F
• • •
F
F
F
F F
High risk area Large call volume Gap in coverage
Average Police Department Staffing Levels •Nationwide 2.51 Officers per 1000 Population •Virginia 2.27 Officers per 1000 Population •Virginia County Police Departments 1.6 Officers per 1000 Population •Albemarle County 1.2 Officers per 1000 Population
*Through 12/01/2014
Debt financing is a critical and necessary element of our Capital Improvement Program. County staff estimates that more than 70% of the funds required for the 5 year CIP will be acquired through debt financing.
The County has a number of financing options available to facilitate the funding of the Capital Improvements Program, including: Collateralized Lease/Revenue bonds Uncollateralized Lease/Revenue bonds VPSA pooled bond financing General Obligation Bond Financing by Referendum bank-qualified financing; others
A General Obligation Bond approved through Referendum results in the best interest rate since the issue is backed by the full faith and credit of the public;
Lease/Revenue Bond, with collateral, result in a “notch” below the AAA rating (approximately 50 basis points, or 5/10 of 1%) due to the risk of nonappropriation; and uncollateralized Lease/Revenue issue would be two notches below the AAA rate;
The difference in issuance costs between a General Obligation Bond and a Lease/Revenue issue are considered immaterial.
Unlike other forms of debt financing, a General Obligation Bond approved through Referendum allows the general public to decide if a project, or collection of projects are to be funded, with an understanding of the required tax rate increase necessary to support the projects.
Can be created by any locality, or any two or more localities, by ordinance
Require a specific boundary
Provide additional, more complete, or more timely services of government than are desired as a whole
Can include services specifically authorized by statute. These include sidewalks, economic development, promotion of business and retail development services, beautification, control of infestations of insects, refuse collection, and sponsorship and promotion of recreational and cultural activities
Not intended to be a separate funding source for governmental services that benefit the entire locality, nor to be a replacement funding source for existing general services.
Jurisdictions can annually levy a tax on the assessed value of all real property within a district to support these services provided in the district. taxes must be kept separate and expended on those identified services.
While not a service district, the county could also establish a Fire EMS zone, in which the County can levy a tax within the district to provide Fire and EMS services within that district.
Over the past five years, County employees’ net wages have been basically flat, due to contributions to VRS, increases in medical insurance premiums, and tax withholding adjustments
After adjusting for inflation, there has been a 6.3% decrease in real wages since FY 10
Chart based on an employee who had a $50,000 annual salary beginning in FY 10 and is enrolled in the County’s employee/family basic medical plan
Albemarle County’s private sector’s inflation-adjusted average weekly wage increased by 1.71% between CY 2009 and CY 2013
This information does not include possible changes in employees’ health care costs or other adjustments over these years that may affect net pay. Sources: Virginia Employment Commission (VEC) Quarterly Census of Employment and Wages and U.S. Bureau of Labor Statistics
Compensation • Classified staff • Target median of our adopted market • Teachers • Target bottom of the top quartile of our adopted market Benefits • Slightly above adopted market benefit levels Who is the County’s Adopted Competitive Market? • Cities, Counties and School Districts and certain local private employers, such as Martha Jefferson and UVA Medical Center for clerical and administrative positions.
Given your understanding of the Five Year Financial Plan situation and your feedback from the community to date, what are your thoughts/reflections at this time regarding the most important priorities over the five years of the plan?
What are your thoughts about the strategies the County (Schools and General Government) should consider/explore to address the funding gap? •Convince state and federal legislators to adequately fund their obligations and mandates • Permission from our state legislators for the same taxing authority as cities currently have •Economic Development Investments that increase current revenue streams •Permission from Albemarle County citizens to use Bonds for Capital Improvement Needs •Special tax districts for services that benefit only certain areas of the County •Partnerships with others to share expenses •Scale back expectations or reduce services if revenue growth doesn’t cover core needs •Increase the property tax rate •Others?
December 10 BOS Work Session Five Year Financial Plan Complete
BOS and School Board Joint Work Session CIP
Superintendent’s Recommended Budget January 15
January 29
Superintendent Presents Recommended Budget to School Board
Public Hearing on Recommended School Division Budget
County Executive’s Recommended Budget February 19
February 23
County Executive Presents Recommended Annual Budget to BOS
Public Hearing on County Executive’s Recommended Budget
