Berks County

Proposed FY2009 Budget

County Commissioners MeetingNovember 18, 2008

Berks CountyFY2009 Budget Presentation

• Budget Schedule

• Summary of Proposed Budget

• Significant Budget Factors

• Significant Capital Plan Changes

• Budget Initiatives

• Budget Execution Risks

• Select Budget Details

• Budget Projections

• Questions and Commentary

Berks CountyProposed FY08 Budget

Budget Schedule

• November 18, 2008 Present Proposed FY09 Budget

• December 16, 2008 Adopt Final FY09 Budget

• Public Review– County Commissioners’ Office

– Budget Office

– County Website www.co.berks.pa.us

Berks CountyProposed FY09 Budget Summary

• No tax increase. Tax rate @ 6.935 mills. Net 2009 billing $121.5M

• Total net tax revenue is projected at $125.5M

• General Fund revenue and expenditures of $217.6M and $205.6M, respectfully

• Operating revenue & expenditures of $471.2M and $469.1M, respectfully

• No new headcount. Reflects FTE reduction of 95 budgeted positions.

Berks CountyProposed FY09 Budget Summary- Cont’d

• The budget reflects a surplus of $2.1M. No fund balance is used to balance the budget

• $22.68M in capital projects. Partially fund with $6.3M of Reserves. Only AgLand and open space is funded with debt.

• Set aside $1.34M of general fund balance for future capital needs

• Unreserved/undesignated fund balance is projected at $101.9M or 21.7% of total operating expenditures

Berks CountySignificant FY09 Budget Factors

Decreases:• Assessed value increase only

0.95% - decrease in tax revenue ($908K)

• Nursing home MA increase only 1% - revenue decrease ($800k)

• Increases pension costs ($7.8M)

• Lower interest rates –reduced interest income ($500K)

Increases• Refinance and reduce debt –

lower debt service $3.5M

• Defer CRC program – reduce operating costs by $3M

• Youth Ctr. Bed mix change – reduce cost by $630K

• Reduce headcount –lower personnel costs by $1.6M

Berks CountySignificant FY 08 to 09 Capital Changes

• Tabled the Prison expansion project – reduced capital by $17M

• Tabled the Video Visitation project – reduced capital by $1.2M

• Tabled Haycreek trail project – reduced capital by $3.9M

• Committed $6.75M of reserves to 2009 capital projects

• Reduced outstanding debt by $55.6M P &I (Principal only $30.6M)

Berks CountyProposed FY09 Budget Initiatives

• Strategic planning. Align resources and staff with strategic priorities. Right size

• Lower service costs. Focus on shared resource, process improvement

• Pursue performance contract financing to lower utility costs

• Implement park recommendations-active recreation facilities

• Right size fleet. Move to a lease rental model

• Align not for profit funding with strategy. 2009 funding decrease of $84K. Deeper cuts 2010 – 2012

Berks CountyProposed FY09 Budget Initiatives – Cont’d

• Continued funding of Reading Area Community College @ $3.2M

• Ag Land- $1M for new fed state certification funding. $5.479M in total easement payments. Move to self funded model. No new debt.

• Open space easement acquisitions $724K.

• Conversion of $36M line of credit to GOB debt. Re-allocation of $10M to 911 infrastructure upgrade 2011

• Improve data/decision support with ERP software

• Improve IT capabilities

Berks CountyProposed FY09 Budget Execution Risks

Crime impacts on:• Prison population – 1,200• Children placements in CYS• Juvenile placements in JPO and YDC• Court costsOperational risks:• Pension investment performance – ARC Pmt • Employee health• Net new employees• Final union contract wage increases 2009• Tax growth - Assessed value versus inflation• Federal state budget cuts – unfunded mandates

Select Budget Details

• Tax Revenue and Consumption• Capital Plan Summary•Fund Balance Summary

• Budget Projections

Berks County Tax Revenue Summary

2008 2009

Millage Rate 6.935 6.935

Assessed Value 18,165,776,900 18,337,452,500

Percent Change 1.70% 0.95%

Tax Revenue - Net

Annual Tax Billing $120,298,188 $121,531,444Interims $750,000 $500,000Tax Claim Collections $3,500,000 $3,500,000

Total Tax Revenue $124,548,188 $125,531,444

Note: Tax Revenue is net of discounts and uncollectibles of 4.6%.

Berks CountyTax Consumption by Function

Judicial 28%$35M

Emergency 9110.4%$0.5M

Miscellaneous 2%$2M

Not for Profits 3%$4M

General Govt. 4% $5M

Comm. & Econ. Developmnt

1%$2M

Public Safety 37%$45M

Public Works -2% ($2M)

Culture/Rec. 6%$7M

Youth Detention 1%$1M

Berks Heim -0.4% ($0.5M)

Human Services8%$9M

Debt Service 12% $15M

Berks CountyGENERAL FUND BALANCE OVERVIEW - Year End 2009

(In Millions)

Total Fund Balance 131.568$

Reservations-Cumulative Losses:

Berks Heim (8.427)$ Youth Detention Center (7.124)$ Other Reservations:

Worker Comp Trust Fund (1.866)$ Hazmat, Encumbrances and Other (1.915)$

Designations:

Self Insured Health Fund (4.000)$

Environmental Litigation Fund (1.814)$ Tipping Fees Solid Waste/Recycling Fund (3.126)$

Capital Projects (1.340)$

Total Unreserved Fund Balance 101.956$

Berks County2009 CAPITAL PROJECT Summary (In Millions)

Total Plan $22.68

Prison Projects $4.52 Steam Plant $1.00 County Bridges $2.37 County Parks $5.04 Agland preservation $5.48 IT and ERP Software $1.58 Other projects $2.69

$22.68

Note: Prison includes $3.5M for security system.

Note: Bridge projects include: Berne Station, Buttonwood, Christman Road. $1.8MBridge projects are funded exclusively by fed and state revenues

Note: Park projects include: Antietam Dam repair $3M, Gruber Wagon Works $1M.The projects are funded with county, state and local grants.

2009 2010 2011 2012

Total Revenue 471$ 473$ 480$ 487$

Total Expenditures 469$ 480$ 496$ 507$

Net Surplus/(Deficit) 2$ (7)$ (16)$ (20)$

Unreserved Fund Balance $101M $90M $69M $43M

Percent of Expenditures 21.7% 18.8% 14.0% 8.5%

Assumptions:No tax increase. Deficits funded with fund balance or future budget cutsTax base grows at 1% 2010, 1.5% 2011, 2% in 2012Other revenues grow on average 1% per yearNo decline in federal and state fundingNo headcount growth.

Pension costs increase through 2011 and then decline

Wage inflation contained at 2.5% per year

No new debt. 911 upgrade paid for with 2009 debt at total cost of $10M.

4 YEAR BUDGET PROJECTIONS (In Millions)Berks County

Comments and Questions