Local Government Budget and Fiscal Control Act

1
Local Government Budget and Fiscal Control Act

• Annual Training for Elections Officials
• March 19, 2008
• William C. Rivenbark
• Associate Professor
• School of Government

2
Overview

• Present the major requirements of the Local
  Government Budget and Fiscal Control Act.
• Role of budget officer.
• Role of boards.
• Cover the meaning of budget inclusiveness and the
  definition of a balanced ordinance.
• Discuss the role of elections directors from a
  budgeting perspective, including the importance
  of performance budgeting.
• Present recent changes to the Local Government
  Budget and Fiscal Control Act.

3
Role of budget officer

• In counties having the manager form of
  government, the county manager shall be the
  budget officer (G.S. 159-9).
• The 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. 159-10).

4
Role of budget officer

• Upon 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. 159-11(a).
• County managers, therefore, play an activist
  role, which involves balancing service needs with
  political pressures.
• However, the administrative responsibilities of
  preparing the budget is often delegated to the
  county budget or finance director.

5
Role of boards

• The 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).

6
Role of boards

• Power 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. 163-33(11).
• The 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.
  163-37).

7
Fiscal year and budget calendar (legal)

• G.S. 159-8(b) The budget ordinance of a unit of
  local government shall cover a fiscal year
  beginning July 1 and ending on June 30.
• G.S. 159-10 Departmental requests to budget
  officer by April 30th (includes both budget
  requests and revenue estimates) G.S. 163-107
  requires filing fees of candidates.
• G.S. 159-11(b) Budget and budget message
  submitted to governing board by June 1st
• G.S. 159-13(a) Budget ordinance adopted by July
  1st

8
Budget calendar (administrative)

• Council retreat and citizen input (December)
• Revenue estimates are prepared (December)
• Budget officer begins the process by issuing
  guidelines, instructions, forms, manual, etc.
  (January)
• Department heads submit budget requests,
  performance measures, and work plan (March)
• Revenue estimates are updated (March)
• Proposed budget prepared (April-May)
• Council workshops are held before the formal
  adoption process (May)
• Budget is adopted by ordinance (June)

9
Inclusiveness requirement

• It 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. 159-8(b).
• It 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.

10
Definition of balanced ordinance

• A budget ordinance is balanced when the sum of
  estimated net revenues and appropriated fund
  balance is equal to appropriations G.S.
  159-8(a).
• Appropriated 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. 159-8(a).

11
Directions and limitations of budget ordinance

• The full amount for debt service during the
  budget year shall be appropriated G.S.
  159-13(b)(1).
• The full amount of any deficit in each fund shall
  be appropriated G.S. 159-13(b)(2).
• A 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.
  159-13(b)(3).

12
Directions and limitations of budget ordinance

• The 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.
  159-13(b)(6).
• Sufficient 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. 159-13(b)(15).

13
Filing and publication of the budget

• On the same day that the proposed budget is
  submitted to the board, a copy is filed with the
  clerk for public inspection G.S. 159-12(a).
• The 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.
  159-12(a).
• Not 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. 153-13(a).

14
Role of elections directors

• G.S. 163-35 (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.
• Leadership 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.

15
Role of elections directors

• Planning understand current strengths and
  weaknesses, long with current and future needs.
• Advocacy work with all funding stakeholders to
  obtain necessary resources for service provision.
• Educate communicate with generalists on complex
  issues of the elections function.

16
Performance budgeting

• Performance 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.
• At least three counties (Catawba, Davidson, and
  Rockingham) are giving volunteer departments more
  flexibility in exchange for more accountability.
• Cabarrus 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.

17
Revenue-neutral tax rate (2003)

• In 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. 159-11(e).
• In 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).

18
Amendments to budget ordinance (2002)

• Except 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.
  159-15)
• However, 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. 159-15).
• If 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. 159-15).