Home Locations Asheville County CAFR Receives Stellar Raves

County CAFR Receives Stellar Raves

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By Leslee Kulba-Buncombe County’s Director of Finance Donna Clark presented last year’s Comprehensive Annual Finance Report (CAFR) to the county commissioners with a focus on the reporting. For the fourteenth consecutive year, the auditors deemed the county’s CAFR to be outstanding. This year, the auditors had neither findings nor recommendations. Complimenting the county’s finance department, auditor Chuck Killian said, “It was a very efficient, clean audit from start to finish,” and added, “Everything fell into place beautifully this year.”

For FY 2014, Buncombe County has an operating budget of $337,600,000. The general fund is 0.5 percent lower than last fiscal year. Revals showed countywide depreciation of $2.8 billion, so the commissioners raised the tax rate from 52.5 to 56.9 cents per $100 of assessed property value, with the stated objective of remaining revenue-neutral. In addition, the county levied a 3.5-cent tax for the new Culture and Recreation Authority. In the future, this unelected body will levy its own taxes up to the state cap of 7 cents. 53.9 percent of revenues are expected to come from property taxes and 20.2 percent from other taxes.

The state requires counties to maintain a fund balance, or rainy-day fund, equal to 8 percent of their general fund expenditures. Buncombe County imposes a 15-percent minimum on itself, and it now boasts a general fund balance equal to $51,700,000, or 19.8 percent of the general fund. When capital funds are considered, the county’s fund balance is $143,000,000, up $23,000,000 from last year. The increase is largely attributable to funding the county received for construction of new schools and AB Tech improvements. The latter are funded with debt to be reimbursed by the recent quarter-cent tax increase.

At the close of the last fiscal year, the county had $289.7 million in long-term debt outstanding. This represented a 21.1 percent increase over the previous year. $44.7 million was backed by the full faith and credit of the county, and $229.2 million was to be collateralized with the assets purchased and constructed. $12.9 million was issued in Product Development Funds (otherwise known as Tax Increment Financing). This speculative financing tool is to be repaid with tax revenues collected from the Woodfin Downtown District, for which the debt was floated in the first place, when it is completed. The county had to push the completion date back five years already.

The county managed to maintain its top-notch bond ratings, AAA from Standard and Poor’s and Aa2 from Moody’s. The state allows counties to incur general-obligation-bond debt up to 8 percent of assessed property values. Buncombe County has been conservative, using only 43.6 percent of its debt capacity. At the beginning of the year, the county’s long-term debt was $289,700,000, up $50,400,000 from last year. New debt is being used for new schools, new courtrooms, new landfill cells, police training facilities, and communication upgrades. The county is currently in contracts for twenty major construction projects. The county frequently refinances debt, but not to postpone payment. Last year, the county refunded bonds to save $1.2 million over 10 years and $5.5 million over 13 years.

Leadership at the state level is well aware of the toll unfunded liabilities have taken on cities like Detroit and San Bernardino. For that purpose, it has established the Local Governmental Employees’ Retirement System (LGERS), a defined-contribution plan. There are separate retirement programs for law enforcement officers, firefighters, and registers of deeds. The CAFR reports retirement and pension plans are not fully funded, but Clark explained. When the county hires people, their pensions are not fully funded, but contributions to their plans will be actuarially on-target to avail full benefits upon their retirement. Due liabilities are fully covered for the current year.

Notable changes to the budget included an additional $900,000 for compliance with the Affordable Care Act. Withdrawal of federal welfare funding caused the county to contribute an extra $2.3 million to maintain service levels. $1.2 million was spent on eight new social workers and seven new police officers to answer to media demands for protection against copycat school massacres, and another $1.2 million went toward beefed-up security in the renovated courthouse and jail expansions. The county also increased is funding for the Asheville and Buncombe County school systems by $1.6 million. Department budgets were not presented in sufficient detail to make any conclusions about efficiencies.

The county oversaw the administration of $189,190,152 in federal funds and $105,470,164 in state funds for welfare services. Assuming a greater role in rearing and nurturing women and children, the county spent over $12 million in state and federal assistance for food. Over $25 million in state and federal funds were spent on family programs such as daycare, TANF, and crisis intervention. Over $219 million was accepted for women and children’s health. The federal government gave the county $59,908 to fight against AIDS, $44,914 to prevent bioterrorism, and $45,912 for family planning. Three federal awards were received for Tobacco Prevention, and over $1.1 million in state and federal gang prevention aid was accepted.

The Department of Homeland Security availed $230,000 to the county for Urban Search and Rescue and Domestic Preparedness, and a small amount ($86,765) trickled in from the Help America Vote Act. The state, among many other programs, gave the county $284,968 from lottery proceeds and $2,795 for a line item termed, “Mosquito – Public Health Pesticide.” The One North Carolina Fund, which supplements corporate welfare recruitment by local governments, only kicked $111,820 into the county’s budget last year.

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