Budget Update: Commissioners Get Financial Forecast, Move Closer to Finalizing Spending Plan

Building on a March budget work session and December budget retreat, Buncombe County Commissioners continued to move toward bringing the Fiscal Year 2023 (FY23) budget into focus. On April 26, Commissioners discussed community centers, financial forecasts, potential capital projects, and more during their third budget work session. During the two-hour meeting, the following budget-related issues were discussed.

Note: FY23 runs from July 1, 2022-June 30, 2023.

Community center repairs

In December, Commissioners inquired about the status of the four County-owned community centers (Sandy Mush, Big Ivy, Bent Creek, and Beech) and how they might be better utilized. Staff created a five- to 10-year plan for potential maintenance and repairs that would address priority issues involving safety. Staff identified 46 top-tier safety and facility improvement issues and have begun making improvements. General Services is budgeting about $150,000 for FY23 to complete those repairs.

County staff sees our community centers portfolio as a missed opportunity to better engage our community and offer County services at these locations.

Arts and culture funding

Currently, organizations seeking County funding for arts and culture need to apply for broader programs. Commissioners are interested in options for a funding process dedicated to cultural events, performing arts, creative jobs, museums, artist residencies, and other arts and culture-related projects. Commissioners were presented with four options for future arts and culture funding:

• No change: Continue through existing annual competitive grant programs
• Earmark Strategic Partnership Grants: Set aside funding specifically for arts and culture from this $900,000 grant program.
• Establish a new pool of funds for arts and culture: Allow the County to create a specific fund for arts and culture with a specialized process for applying.
• Establish an arts and culture block grant: Have a third party administer the application, review, and award process.

Commissioners also asked staff to look at including STEM-oriented organizations such as the WNC Nature Center eligible for arts and culture funding. They will also decide how much grant funding and administrative costs they will dedicate toward this effort.

FY22 year-end projections

For FY22, the current budget is $388.7 million, with $360.6 million in budgeted revenues, and a $12.9 million appropriated fund balance, excluding capital transfer. Expenditures are expected to reach 96% of the FY22 budget, with revenues projected at 102.9% of the FY22 budget.

Projected FY23 revenues

County staff estimates revenues for FY23 will be $382,200,000. Proposed revenues are up from the current budget in a number of areas, with a total of $21,600,000 in projected new money.

Buncombe County’s largest sources of revenue are:

• Property tax: Accounts for 63% or $240,300,000 of revenue
• Intergovernmental funds: Accounts for 12% or $45,500,000 of revenue
• Local option sales tax: Accounts for 12% or $47,800,000 of revenue

Other forms of County revenue include sales, services, interfund transfers, licenses, permits, fees, and other sources.

Projected FY23 expenditures

The proposed budget’s expenditures continue to evolve as Commissioners complete work sessions. Since the last meeting, staff decreased the number of requested new positions from 71 to 61 and suggested using staggered starting dates to space out costs. Other expenditures that have been reduced include: contingency funding, operating reductions, and transfers for incentive payments and sidewalks. All of those adjustments bring the proposed budget down by $4,380,000 to a total of $393,900,000.

Buncombe County’s largest expenditures are:

• Salaries and benefits: Accounts for 43% or $170,800,000 of expenditures
• Program support: Accounts for 33% or $129,800,000 of expenditures
• Operating: Accounts for 15% or $58,900,000 of expenditures

Other expenditures include debt service, financing, capital outlay, and contingency funding.

Fund balance

North Carolina suggests all counties to carry a fund balance of at least 8% of their total budget. Buncombe County carries a 15% fund balance, which would allow the County to run for about two months with zero revenues being taken in.

For FY23, the County is projected to have $30,400,000 above its 15%-required savings available in its fund balance. About $2,400,000 is projected to be used for capital project transfers. Commissioners have a number of options about what to do with the additional fund balance money such as one-time expenditures, education spending, keeping it in savings, or other options.

Commissioners have directed staff to research ways to potentially use the additional money. Some options include funding services, paying for capital projects, or increasing the County’s fund balance percentage. The County projects to end FY24 (ending July 2024) with a 16.5% fund balance.

Capital projects

Buncombe County has some capital projects on the horizon for the upcoming fiscal year. In all, there is an estimated $20,498,815 in projects such as EMS base construction, library renovations, parks improvements, Sheriff’s vehicles, and installation of solar panels on public buildings. Of that projected cost, $15,260,000 would be funded with debt. The rest would be offset by dollars already transferred to the capital fund.

Next steps for the FY23 proposed budget

• Education & Fire Districts Work Session – May 10
• Recommended Budget – May 19 regular meeting
• Public Hearing – June 7 regular meeting
• Budget Adoption – June 21 regular meeting

For additional information and documents from this budget work session, click here. All work sessions, meetings, and public hearings are streamed live on Buncombe County’s Facebook page.