1. Montgomery County Government: Organizational and Fiscal Structure Jennifer Hughes, Director Office of Management and Budget September 21, 2012 www.montgomerycountymd.gov/omb

2. 2 Overview Organization Oversight and Accountability Budget Process & Fiscal Structure

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4. 4 Oversight and Accountability Internal Audit (Executive Branch) Annual Audit of financial statements by an independent audit (Executive Branch) CountyStat (Executive Branch) Inspector General (Legislative Branch) County Council & Committees Office of Legislative Oversight (Legislative Branch) P-Card Monitoring and Reviews (Exec. Branch - DOF) Expenditures over $10,000 (Exec. Branch - DOF) Other forms of Accountability: Supervisory; to County Executive and Chief Administrative Officer; and to County Council. Media Elections, Charter questions, and Referenda

5. 5 Major Differences Between the CIP and the Operating Budget CIP 6 Year Budget (Capital Budget is the first year) Approved biennially. Infrastructure (roads & buildings) Long-life Often debt-financed Majority of spending is for sitework and construction Operating Budget 1 Fiscal year Approved annually. Programs and services Expenses typically continue every year. Typically funded with current revenues Majority of spending is for staffing costs

6. 6 Budget Process Key Facts The County Executive develops and recommends budget proposals; the Council authorizes expenditures and sets tax rates. Annual six-year Public Services Plan, Operating Budget, and Capital Budget, and biennial six-year Capital Improvements Plan. Capital budget submitted to Council by January 15 th ; proposed Operating Budget by March 15 th. Aggregate budget cannot grow more than CPI-U Washington- Baltimore without a minimum of six Council votes. Executive veto or reduction of items in Council approved budget. 1990 Charter amendment limit on property tax revenues. Charter Limit exceeded four times: FY03-05 and FY09. As of 2008 Charter amendment, to exceed the Charter Limit, requires 9 council votes.

7. 7 Summary: Operating Budget Process Sept-December: MCG Departments Prepare Submissions December/January: Agencies submit budgets to County Executive/Council December – March: OMB Reviews Submissions and Makes Recommendations to County Executive March 15: County Executive Transmits Budget to the County Council Early April: County Council Public Hearings April – May: County Council/Committees reviews budgets By June 1: County Council Approves Budget

8. 8 FY13 ALL AGENCIES / ALL FUNDS WHERE THE MONEY COMES FROM TOTAL APPROVED RESOURCES - $5,106.2 (million) WHERE THE MONEY GOES * TOTAL APPROVED USES OF FUNDS - $5,106.2 (million) *This total covers the full Operating Budget, and funds to the CIP, Debt Service, and Reserves. Of this amount $4,612,253,211 is approved in the Operating Budget.

9. FY13 EXPENDITURES BY FUNCTION TAX SUPPORTED EXPENDITURES - $4,020.5 (million) TOTAL EXPENDITURES - $4,612.3 (million) *Total M-NCPPC includes $4.8 million debt service.

10. 10 FY13 TAX SUPPORTED AGENCIES AND FUNDS WHERE THE MONEY COMES FROM TOTAL APPROVED RESOURCES - $4,428.1 (million) WHERE THE MONEY GOES * TOTAL APPROVED USES OF FUNDS - $4,428.1 (million) *This total covers the full Operating Budget, and funds to the CIP, Debt Service, and Reserves. Of this amount $4,020,477,004 is approved in the Operating Budget.

11. 11 FY13 Tax Supported Expenditures by Function

12. 12 Revenue Volatility: Income Taxes FY05FY06FY07FY08FY09FY10FY11FY12 Est.FY13 Est. Income Tax940.8591044.5621265.3771291.34 $ 1,291.72 $ 1,042.10 $ 1,039.23 $ 1,227.07 $ 1,263.96

13. 13 Revenue Volatility: Transfer & Recordation Taxes FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Est. FY13 Est. Transfer Tax $ 133.7 $ 145.5 $ 106.9 $ 80.4 $ 64.8 $ 77.1 $ 71.8 $ 74.2 $ 80.7 Recordation Tax $ 87.6 $ 96.2 $ 72.7 $ 54.7 $ 42.4 $ 42.8 $ 57.7 $ 45.3 $ 55.9 Total $ 221.3 $ 241.7 $ 179.6 $ 135.1 $ 107.2 $ 120.0 $ 129.5 $ 119.5 $ 136.6

14. 14 Montgomery County Budget Growth Rates 14 FYs 05-07 = 36.5% FYs 08-13 = 15.9% FY05FY06FY07FY08FY09FY10FY11FY12FY13 Montgomery County Govt - Tax Supported11.0%11.4%14.1%6.7%1.5%-2.2%-7.0%5.1%11.8% Total Tax Supported8.1%8.3%9.8%7.4%3.7%1.6%-5.0%3.5%6.2% Total Budget7.4%7.7%9.0%7.2%4.3%3.0%-4.5%2.2%5.6%

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16. 16 Operating Budget Rate of Growth