HomeMy WebLinkAboutRESOLUTION re: 2022-2023 MidBiennium Consent Agenda
Commissioners Office
JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
CONSENT AGENDA REQUEST
TO: Board of County Commissioners
FROM: Mark McCauley, County Administrator
DATE: August 1, 2022
SUBJECT: Resolution, re: Establishing Objectives and Procedures for the 2022-2023 Mid-
biennium Review and Modification
STATEMENT OF ISSUE: As the 2022-2023 Biennial Budget Mid-Biennium Review and Modification is
upon us staff held a workshop with the Board of County Commissioners on July 25th, 2022 to discuss
prevailing and projected economic conditions. These conditions coupled with staff budget projections helped
the Board provide staff guidance as they developed a resolution containing assumptions and related guidance
for department directors and elected officials as they prepare their mid-biennium submissions for 2023. Staff
is proposing that the attached resolution be adopted.
ANALYSIS: The United States is now officially in a recession with two quarters of negative GDP growth in 2022.
Given the economic challenges we are/will be facing coupled with the generous employee compensation increases
and new general fund positions approved in the 2022-2023 budget, staff recommended a very conservative
approach for 2023.The Board agreed with this approach which includes: a freeze on new positions and other
general fund enhancements,a reduction in the traditional base budget increases from 3%to 1.5%,and no increase in
general fund transfers to other funds.There may be exceptions to include requests fully funded with new revenues,
non-discretionary items and requests the Board may choose to approve.
FISCAL IMPACT: None.
RECOMMENDATION: That the Commissioners approve the attached resolution.
RE EWED BY:
11744.44L—A /
Mark Mc.:ley, County Administrat• D to
STATE OF WASHINGTON
County of Jefferson
In the Matter of Establishing Objectives}
and Procedures for the 2022-2023 } RESOLUTION NO.=22
Mid-Biennium Review and Modification}
WHEREAS, Jefferson County adopted a 2022-2023 Biennial Budget in December 2021;
and
WHEREAS, Section 3.01.020, Jefferson County Code requires a mid-biennium review and
modification to account for new information that will impact the originally adopted budget for
2023; and
WHEREAS, recent inflation figures show a 9.1% year over year increase in prices which
will substantially increase the County's costs to provide much needed services; and
WHEREAS, the Federal Reserve increased the interest rate a total of 1.50% in June and
July 2022 bringing the federal funds rate to between 2.25% and 2.50%; and
WHEREAS, rising interest rates depresses economic activity, especially for durable goods,
cars and housing; and
WHEREAS, we saw negative Gross Domestic Product (GDP) growth in the 1st and 2nd
quarters of 2022 indicative of a recession; and
WHEREAS, as stewards of the public purse, we have an obligation to account for these
fiscal realities as we prepare the mid-biennium review and modification;
NOW, THEREFORE BE IT RESOLVED, that the Board of Commissioners of Jefferson County
does hereby establish the following objectives and procedures to guide the development and
adoption of the 2022-2023 Mid-Biennium Review and Modification:
I. FISCAL BUDGET OBJECTIVES
1. Balanced budget - The budget, when adopted, will be balanced within available resources.
In addition to annual fiscal objectives, there should also be a focus on long-term financial
analysis. The County will continue to use multi-year budget forecasting for analyzing impacts
the current budget will have on future revenues and expenditures.
2. Use of Unreserved Fund Balance - The County continues to use a strategy of apportioning
and gradually drawing down the General Fund's unreserved fund balance over the course of
its five-year budget projection, while simultaneously aligning future expenditures to match
future revenues. The current General Fund projection shows the unreserved fund balance
declining over the five-year projection period. In 2023, and in each of the additional four years
of the five-year budget projection, no more than one-half of the previous year's projected
ending General Fund unreserved fund balance should be budgeted for expenditures.
3. Property Taxes - Growth in property taxes for the General Fund, Roads Fund and
Conservation Futures Fund shall not exceed the 1% limit, plus taxes collected on new
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construction.
4. Sales Taxes — The County shall budget and administer General Fund sales tax revenues
consistent with Jefferson County Resolution No. 32-10 (Special Purpose Tax levy resolution).
5. Extraordinary General Fund Revenues—Some General Fund revenues vary significantly year-
to-year - e.g. private timber harvest, DNR Forest Board Trust revenue, etc. - or are non-
recurring. If those revenues are received above the adopted 2022-2023 Budget, the excess
will be dedicated to recover shortfalls in other General Fund revenues first, and any remaining
excess revenue may be dedicated for any of the following purposes: the County's Capital
Improvement Program such as the Construction and Renovation Fund, other one-time costs
(including staffing expenditures to address retirement transitions), and for additional
reserves to recover future revenue shortfalls from volatility. Certain non-recurring revenues
that are intended to pay for or reimburse the County for services it provides (e.g. state
extraordinary justice appropriation) may also be retained in the General Fund for those
purposes.
6. Extraordinary Other Fund Revenues
a. Pandemic Recovery
Covid-19 has brought significant impacts to residents, businesses and other organizations in
2020-2022. It has also brought significant federal resources to the County via the American
Rescue Plan Act. The 2023 Budget reflects expenditures to assist in pandemic recovery in a
myriad of allocations to address immediate needs and to invest in long-term structural
change for future resilience.
b. Investment in Wastewater Treatment Infrastructure in Port Hadlock
The Federal government is investing in infrastructure upgrades, and Jefferson County has
been appropriated over $20M of these funds to build the long-planned for Port Hadlock
Sewer over the next 4 years. This project will bring added density for housing and services to
the only unincorporated Urban Growth Area in the County. Habitat for Humanity has an
affordable housing project planned in Port Hadlock that will help make the sewer financially
viable while reducing any needed subsidy from other sources.
7. Road Fund — As funding allows, the BoCC intends to transfer a portion of excess PILT to the
Roads Fund to recover as much of the shortfall of any amount below $540,222 (3% increase
over 2022) in 2023 that Secure Rural Schools or Federal Timber revenues contribute to the
Roads Fund. In 2023, $620,000 of the County Roads levy will be diverted to the General Fund
to be used only for road traffic safety enforcement consistent with state law.
8. Budget priorities—The County's priorities continue to include:
a. Pay our employees fairly and at a livable wage, aiding recruitment and retention;
b. Support mandated services while balancing levels of service with other priority services;
c. Support local law and justice programs, including evidence-based prevention,
intervention and recovery programs;
d. Address locally identified and defined public health issues;
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e. Protect and enhance natural resources;
f. Invest in community infrastructure that encourages economic opportunity;
g. Find means to support other critical services for a healthy community;
h. Use capital funds and other funds as necessary to meet the County's debt service
obligations;
i. Plan for long-term capital facility needs including strategic investments in technology to
support operational efficiencies and maintain and improve public services;
j. Operate within a business plan based on fiscal sustainability, measured performance, and
the best customer service within our means;
k. Maintain a professional county workforce that can meet the service delivery needs of the
County, including budgets for required training and departmental training plans to
maintain a qualified workforce with emphasis on transitions created by the retirements
of long time County employees; and
I. Look for cost savings opportunities - Continue to evaluate and implement where
appropriate opportunities to:
i. Continue to seek opportunities to save costs of boards and commissions, e.g.
conso►idating work programs and reducing the frequency of meetings.
ii. Consolidate programs or services to gain efficiencies and improve customer
service, where appropriate.
iii. Seek additional funding sources to support services through contracts, grants,fees
and other funding sources.
iv. Continue to partner with other local agencies to improve service delivery and/or
reduce costs.
v. Privatize and/or outsource services, programs, and functions where appropriate.
9. Departmental Preparation of Preliminary Budgets - Departments should prepare
preliminary budgets consistent with the following guidelines:
a. Prepare departmental preliminary budgets following steps listed in Section II. Budget
Preparation of this document.
b. For the Preliminary Budget, union staff personnel costs (salaries, wages, & benefits) will
be adjusted to include annual step increases with no wage adjustment as per our
approved collective bargaining agreements.
c. FLSA and union exempt management and professional employee wages and salaries for
2023 shall include annual step increases with no wage adjustment as per our approved
collective bargaining agreements.
d. Elected Official wages will be adjusted consistent with Resolution s 76-21 and 83-21 based
on RCW 43.03.012. Superior and District Court Judges' wages will be adjusted per RCW
43.03.012.
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e. For any FTE increase in a General Fund Department proposed above,the FTEs included in
the 2023 salary schedules must be budget neutral. FTE increases that are not budget
neutral will require substantial justification in order to be considered. FTE increases that
are temporary and meet the one-time expenditure requirements will be considered on a
case-by-case basis. Any FTE increase in other Funds proposed above the FTEs included in
2023 salary schedules must be supported by a financial analysis showing that the FTE
increase can be afforded in the budget year, and if ongoing, demonstrate it is sustainable
within the Fund in future years. Departments should refer to Resolution 01-14 which
documents the guidelines for budgeting for replacement positions and new positions.
f. Target base budget numbers and FTEs will be given to all General Fund departments for
the preliminary budget on or about August 1, 2022. The target numbers will be the 2023
Base Budgets. The target numbers will be developed using:
• 2023 Salary schedules prepared by Auditor's office.
• Facility, Information Services and ER&R cost allocations for 2023.
• Other costs will be limited to a 1.5% increase to the 2022 levels (except certain
externally-driven costs in Non-Departmental).
• Transfers from the General Fund to Other Operating Funds in 2023 will be remain at
2022 base budget levels as approved by the BOCC in December, 2021. One-time
expenditures allocated to departments in 2022 will not be included in the 2023 base
budget.
g. Departments are encouraged to collaborate to achieve budget targets.
h. Budgets for other funds shall be prepared as balanced budgets. All increases, including
any wage and benefit increases, will be absorbed within available resources or offsetting
cost reductions within that fund.
i. Recommended reserves shall be maintained for each fund as established by resolution.
Where fund reserves are below targets, departments shall submit a plan and schedule to
restore reserves as soon as practicable.
j. Fees - Set fees at levels that recapture the cost of the service being provided, where
possible.
II. BUDGET PREPARATION
1. Overview. Budget requests shall be prepared in a consistent, citizen friendly format that
clearly identifies the resources needed and the services to be provided by each program.
2. Format and Schedule. Departments shall prepare budgets following the standard format and
schedule provided to them in the 'Call for Budgets' from the County Auditor that includes the
department organizational chart, general ledger budget proposed, and when applicable,
Form A: General Fund Add Request (see # 4. below). Departments will be scheduled to
present their proposed budgets to the Board of County Commissioners in early October.
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3. Additions to General Fund Base Budgets, including Form A: General Fund Add Request.
• Departments in the General Fund requesting a one time or on-going increase to their base
budget, and Other Operating Funds requesting more than a 0%increase to a General Fund
transfer, will use Form A to request the increase.
• Add Requests submitted and approved in 2021 for 2023 Budget will be forwarded to the
mid-biennium review and modification process occurring in 2022.
• Additional Add Requests for 2023 may be submitted in 2022 for the mid-biennium review
and modification.
• Departments may request to meet with the County Administrator and the Board of
County Commissioners to review their Add request.
4. Budget Process.
• The budget process adheres to the Budget Calendar previously established.
• Department Request budgets shall be transmitted to the County Auditor on or before
noon on September 6, 2022.
• The Preliminary Budget is completed by the Auditor and forwarded to the County
Administrator, Board of County Commissioners.
• The proposed revenues and expenditures for each Fund or Department shall be reviewed
for their impacts on the County's financial health for the next five years.
• If reduction or enhancement targets are established for functional groups of departments
(i.e.: Law & Justice, Administrative Services, and Community Services), the County
Administrator may ask departments to meet with the other departments within their
functional group to recommend how such cuts or adds should be distributed to one or
more departments in the group.
• The County Administrator shall prepare a Recommended 2023 Budget incorporating
Board decisions/guidance for review, a public hearing, and action by the Board of County
Commissioners.
5. Additions to General Fund Base Budgets. "Form A: General Fund Add Request" Departments
in the General Fund requesting a one time or on-going increase to their base budget, and
Other Operating Funds requesting more than a 0% increase to a General Fund transfer, will
use Form A to request the increase. Add Requests for 2023 submitted in 2021 should be
resubmitted - noting that they were approved in 2021 - for the mid-biennium review and
modification process occurring in 2022. Additional Add Requests for 2023 may be submitted
in 2022 for the mid-biennium review and modification.
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APPROVED this day of August, 2022:
JEFFERSON COUNTY
SEAL: BOARD OF COMMISSIONERS
Heidi Eisenhour, Chair
ATTEST Kate Dean, Member
Carolyn Gallaway Greg Brotherton, Member
Clerk of the Board
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