Local Government Budget and Fiscal Control Act Annual Training for Elections Officials March 19, 2008 William C. Rivenbark Associate Professor School of Government

Overview zPresent the major requirements of the Local Government Budget and Fiscal Control Act. zRole of budget officer. zRole of boards. zCover the meaning of budget inclusiveness and the definition of a balanced ordinance. zDiscuss the role of elections directors from a budgeting perspective, including the importance of performance budgeting. zPresent recent changes to the Local Government Budget and Fiscal Control Act.

Role of budget officer zIn counties having the manager form of government, the county manager shall be the budget officer (G.S ). zThe budget request shall be an estimate of the financial requirements of the department for the budget year, and shall be made in such form and detail, with such supporting information and justifications, as the budget officer may prescribe (G.S ).

Role of budget officer zUpon receipt of the budget requests and revenue estimates, the budget officer shall prepare a proposed budget that is balanced unless otherwise directed by the board to present an unbalanced budget [G.S (a)]. zCounty managers, therefore, play an activist role, which involves balancing service needs with political pressures. zHowever, the administrative responsibilities of preparing the budget is often delegated to the county budget or finance director.

Role of boards zThe board of commissioners has and shall exercise the responsibility of developing and directing the fiscal policy of the county government under the provisions and procedures of the Local Government Budget and Fiscal Control Act (G.S. 153A-101).

Role of boards zPower and duties of county boards of elections include, preparing and submitting to the proper appropriating officers a budget estimating the cost of elections for the ensuing fiscal year [G.S (11)]. zThe respective boards of county commissioners shall appropriate reasonable and adequate funds necessary for the legal functions of the county board of elections, including reasonable and just compensation of the director of elections (G.S ).

Fiscal year and budget calendar (legal) zG.S (b) – The budget ordinance of a unit of local government shall cover a fiscal year beginning July 1 and ending on June 30. zG.S – Departmental requests to budget officer by April 30th (includes both budget requests and revenue estimates); G.S requires filing fees of candidates. zG.S (b) – Budget and budget message submitted to governing board by June 1st zG.S (a) – Budget ordinance adopted by July 1st

Budget calendar (administrative) zCouncil retreat and citizen input (December) zRevenue estimates are prepared (December) zBudget officer begins the process by issuing guidelines, instructions, forms, manual, etc. (January) zDepartment heads submit budget requests, performance measures, and work plan (March) zRevenue estimates are updated (March) zProposed budget prepared (April-May) zCouncil workshops are held before the formal adoption process (May) zBudget is adopted by ordinance (June)

Inclusiveness requirement zIt is the intent of this Article (Local Government Budgeting and Fiscal Control Act) that, except for moneys expended pursuant to a project ordinance, accounted for in an internal service fund, or accounted for in a trust or agency fund, all moneys received and expended by a local government or public authority should be included in the budget ordinance [G.S (b)]. zIt is common for counties to use a separate budgeting process for major capital projects, which is referred to as capital budgeting or capital improvement program.

Definition of balanced ordinance zA budget ordinance is balanced when the sum of estimated net revenues and appropriated fund balance is equal to appropriations [G.S (a)]. zAppropriated fund balance in any fund shall not exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts, as those figures stand at the close of the fiscal year next preceding the budget year [G.S (a)].

Directions and limitations of budget ordinance zThe full amount for debt service during the budget year shall be appropriated [G.S (b)(1)]. zThe full amount of any deficit in each fund shall be appropriated [G.S (b)(2)]. zA contingency appropriation shall not exceed five percent of the total of all other appropriations in the same fund, except there is no limit on contingency appropriations for public assistance programs required by Chapter 108A [G.S (b)(3)].

Directions and limitations of budget ordinance zThe estimated percentage of collection of property taxes shall not be greater than the percentage of the levy actual realized in cash as of June 30 preceding the fiscal year [G.S (b)(6)]. zSufficient funds to meet the amounts to be paid during the fiscal year under continuing contracts previously entered into shall be appropriated unless such contract reserves to the governing board the right to limit or not to make such appropriation [G.S (b)(15)].

Filing and publication of the budget zOn the same day that the proposed budget is submitted to the board, a copy is filed with the clerk for public inspection [G.S (a)]. zThe clerk shall make a copy available to all news media and a statement is published (newspaper of general circulation) that the proposed budget has been submitted to the board and that gives notice of the time and place of public hearing [G.S (a)]. zNot earlier than 10 days after the budget is presented to the board and not later than July 1, the governing board shall adopt a budget ordinance [G.S (a)].

Role of elections directors zG.S (d) allows boards of elections, by resolution, to delegate as much of the administrative detail to the director as it may see fit, which would include budgetary responsibilities. zLeadership – work with volunteers, staff members, county board of elections, state board of elections, county manager, finance or budget director, and board of county commissioners to accomplish the goals and objectives of the elections function.

Role of elections directors zPlanning – understand current strengths and weaknesses, long with current and future needs. zAdvocacy – work with all funding stakeholders to obtain necessary resources for service provision. zEducate – communicate with generalists on complex issues of the elections function.

Performance budgeting zPerformance budgeting is a process that emphasizes performance measurement, allowing allocation decisions to be made in part on the efficiency and effectiveness of service delivery. Performance data are especially useful for justifying expansion budgets. zAt least three counties (Catawba, Davidson, and Rockingham) are giving volunteer departments more flexibility in exchange for more accountability. zCabarrus County tracks a number of performance measures for the elections function, including number of eligible voters, number of registered voters, percentage of eligible voters registered, and turnout percentages.

Revenue-neutral tax rate (2003) zIn each year in which a general reappraisal of real property has been conducted, the budget officer shall include in the budget, for comparison purposes, the revenue-neutral tax rate for the budget [G.S (e)]. zIn practical terms, the revenue-neutral tax rate is the rate that, when applied against the assessed value after revaluation, would produce current year revenue (the statue does allow for an average annual growth rate adjustment).

Amendments to budget ordinance (2002) zExcept as otherwise restricted by law, the governing board may amend the budget ordinance at any time so long as it remains in balance (G.S ) zHowever, no amendment may increase or reduce the property tax levy (tax rate) unless ordered by a court of competent jurisdiction or state agency with authority (G.S ). zIf after July 1, the local government receives revenues that are substantially more or less than the amount anticipated, the governing board may, before January 1, amend the budget ordinance to change the tax levy (tax rate) (G.S ).