By Leslee Kulba- The 2015-2016 Buncombe County Comprehensive Annual Financial Report is now available for public consumption. The report won the Government Finance Officers’ Association’s Certificate of Achievement for Excellence award for the thirty-seventh consecutive year and the Distinguished Budget Presentation for the seventeenth consecutive year. The county further passed its audit with flying colors and retains bond ratings of AAA from Standard & Poor’s and AA1 with a positive outlook from Moody’s.
The county also publishes a PAFR, the P standing for “popular.” It claims to convey the information in the CAFR in a more transparent and accessible manner to folks like you and me. To do so, it replaces tables and explanatory notes with hieroglyphics and photos of people of diverse ethnicities in nontraditional gender roles. The text begins, “We are excited …”
Data includes numbers like the “average high temperature” and definitions like, “The general fund … accounts for all financial resources of the general government except for those required to be accounted for in a different fund. The core services of Buncombe County are accounted for in the General Fund, in addition to other services.” That said, the document won an Award for Outstanding Achievement in Popular Annual Financial Reporting from the GFOA; and it’s a handy, quick reference guide.
Overview & Highlights –
The total general fund budget for 2015-2016 was just short of $300 million. The three largest categories of spending were Human Services ($88,590,319), Education ($82,359,578), and Public Safety ($59,188,461). Debt service, at $19,143,867, made up 6.58 percent of the budget.
For Human Services, the state requires the county to staff its own offices to directly execute certain programs. For other programs, the county need only make sure other agencies are providing the services. Consequently, a number of public-private partnerships have been forged, decreasing the amount of local tax revenue spent on health and welfare.
The county’s Health & Human Services Department’s Public Assistance programs help low-income families with employment, food assistance, healthcare, and insurance. Its Public Health services include birth control, disease control, parenting support, STD services, and travel vaccines. The department also includes Social Work Services and Veterans’ Assistance.
On top of county expenditures, state and federal agencies contribute directly to clientele for the following programs: Supplemental Nutrition Assistance Program ($3,226,596), child welfare ($1,047,293), adoption ($2,095,945), medical assistance ($296,932,209), home energy ($894,300), Special Assistance ($1,473,009), Foster care ($1,524,054), State Children’s Health Insurance Program ($4,961,720), and Temporary Assistance for Needy Families ($842,259).
The state requires the county to retain an amount equal to no less than 8 percent of general-fund expenditures in fund balance. The county self-imposes a higher limit of 15 percent, and finished the fiscal year with 17.4 percent, or $53.5 million in reserves. Each year during the budget process, the county will make revenues meet expenditures by borrowing from fund balance. Then, it will spend the rest of the year looking for savings to eliminate the draw-down. As a consequence, the fund balance has increased for fourteen consecutive years.
In addition to the general fund, the CAFR reports financials for a general capital projects fund, the new school capital projects fund, the AB Tech capital projects fund, and the collection and expenditure of the Tourism Development Authority’s occupancy tax. There are several funds overseeing human-resource affairs, like pension plans; and only one enterprise fund, which handles landfill operations.
In light of the aforementioned services, it is worth noting Duke Energy Progress, arch enemy of environmentalists and the 99 Percent in general, remains the county’s top taxpayer. Providing 1.14 percent of ad valorem revenues, only Ingles Markets comes close, contributing 0.91 percent. Other big contributors are the Grove Park Inn, the Biltmore Company, Jacob Holm Industries, Town Square West, the Asheville Mall, Novo Nordisk Pharmaceutical, another carbon technology business PSNC, and BorgWarner.
The county’s net position closing out last year, was $17.7 million. This is substantially down from $27.7 the previous year, and $77.2 million the year before that. The drop this year is attributed to the county’s investment in schools. Last year, the county completed construction on the Asheville Middle, Isaac Dickson Elementary, and Enka Intermediate schools. While the county paid for the buildings, the physical assets go on their respective school systems’ books, not the county’s.
At the end of the year, the county remained $477.3 million in debt. $272.2 million of this amount is in the form of general obligation bonds, which are backed by the county’s taxing power. The remainder are collateralized by the objects being financed. $147.6 million and $85.6 million of the remaining debt will pay for capital improvements in the public schools and at AB Tech, respectively, and thus slide off the county’s balance sheet.
Improvements at AB Tech continue to be funded by the quarter-cent local option sales tax. Last year, the tax garnered almost $42 million, while construction expenditures were double that. Work continues on the college’s parking deck, multipurpose building, Allied Health Building, and Rhododendron Building. When the tax was approved in 2011, the commissioners stipulated that it was to be sunsetted in 2029.
The seven-story Health & Human Services Building, under construction on Coxe Avenue, is the largest item remaining in the county’s general capital improvement plan. As of last year, $17,936,966 had been spent of an estimated project total of $41,288,259. Other capital investments under contract include a new firing range, mental health facilities, new voting machines, technology upgrades, and “economic development” unspecified in the CAFR.
What Would a Private Sector Do?
Among programs that don’t pay for themselves are civil asset forfeitures. In North Carolina, a person must be convicted of a crime before assets may be seized; and, per the state constitution, funds must go to the schools. But law enforcement authorities have the option of pursuing cases at the federal level, which allows them to keep 80 percent of seizures for their departments while waiving the conviction requirement. The county’s drug forfeitures fund had revenues of $127,461 this year, but spent $221,073 on administration, so the difference was drawn down from the fund’s $221,073 fund balance.
Judgment may be premature, but the Woodfin Downtown Fund appears slow to get off the ground. In 2006, the county commissioners agreed to contribute $25 million in financing for a $210 million downtown overhaul. Bonds valued at $11,885,000 were floated in 2008 and then refunded in 2014. The county further agreed to reimburse the Woodfin project with general fund revenues any year the tax increment went negative.
Proponents claimed the facelift would increase Woodfin’s tax base from $5.3 million to $277 million. The debt was backed by revenues to be generated by the completed project. Principal and interest outstanding total $18,862,250; and the balance is scheduled to be paid off by 2037. This year, the project generated $331,716 toward its scheduled P&I payment of $558,700.
Items worth pursuing further might include finding out what the community is getting in return for its investment in the WNC Regional Air Quality Agency. It operates separately from the county, but its affairs are included in the CAFR. It has a budget of $1,041,759; 78 percent of which goes toward salaries and benefits.
Then there’s the $2 million the county committed to the Eagle Market Street renewal project but keeps deferring as the sky crane is practically an institution downtown. The project has been trying to get off the ground decades; getting government funding to create subsidized housing on prime real estate, all in the name of advancing the condition of the oppressed. The last the commissioners heard, the still incomplete project was running $4 million overbudget and needing to raise rents on half its units to $1,120-$1400 in order to get potential lenders to take it seriously.
It would also be interesting to know how work is progressing on the Landfill Gas to Energy Project. Back in the era of Porkulus, the county received a $4,061,396 revolving loan from the federal government; $2,561,396 of which has since been “forgiven.” The plant was to produce 1 megawatt off methane gas captured from the Alexander landfill. Duke Energy’s online promo has been taken down, and NC GreenPower’s link goes to a site about Italian cuisine – written in Chinese. The county plans to continue making payments through 2031.
Moving Right along –
Back in June, the commissioners approved a general operating budget of $308.2 million for the current year. All funds totaled $413.5 million. The tax rate remains unchanged at 60.4 cents per $100 of assessed value, but new assessments following the quadrennial revaluation have just been mailed.
The budget was 4.8 percent lower than in FY 2015-2016. A major reason was changes in legislation. House Bill 507 created a school capital fund, which resulted in a transfer of $13 million in anticipated sales tax revenue from the general budget to a new school capital projects fund. Senate Bill 888 then changed the way sales taxes are redistributed between the city and county schools. Formerly, revenues were distributed in accordance with Average Daily Membership; now they may be allocated according to need.
This gave the county a $5 million windfall to spend on pay and benefit increases for certified and non-certified school personnel, equipping the new schools, and setting up a small contingency to protect teacher pay against future legislation. Another $100,000 went toward greenways, and $75,000 funded a last-minute request from the Asheville Museum of Science. Burning through the surplus, along with a commitment to spend $1 million over the next five years designing multimodal enhancements for the I-26 connector project, gave Commissioners Tim Moffitt, Joe Belcher, and Mike Fryar reason to cast token votes against the budget.