Fiscal Year 2004 Proposed Budget

NON-DEPARTMENTAL
DEPARTMENT BUDGET SUMMARY

Non-Departmental accounts include County-wide costs for insurance premiums and claims (including workers' compensation), fringe benefits for retirees (health and life insurance premiums), miscellaneous expenses, County building rent and overhead charges to certain County agencies, and contingents held for future County Board actions such as the General Fund and Affordable Housing Investment Fund.

INSURANCE COSTS: The County's risk financing program is comprised of commercially purchased insurance coverage and retained risks paid for through a program of self-insurance. The County purchases insurance primarily for its property, general liability and automobile liability exposures subject to prudent deductible or retention levels. These include real and personal property, crime, garage keepers, professional liability and constitutional office coverage. Retained exposures include general liability, automobile damage and related liability up to specific retention levels. At this time the County has a $1 million retention level for general liability. In addition, the County allocates a portion of fund balance to maintain a Self-Insurance Reserve ($3,500,000) and a General Fund Operating Reserve ($12,600,000). The General Fund Operating Reserve is funded at two percent of General Fund expenditures.

• Increases in costs (premiums and claims) are driven by catastrophes (September 11, 2001), medical cost increases, and the cost of settlement claims for workers' compensation.

RETIREE BENEFITS/HEALTH ADJUSTMENT: This account includes the employer's share of retirees' health and life insurance costs. The actual expenditures also include the year-end health care adjustment for the County's indemnity plan. Accumulated premiums collected less actual claims paid determine the health adjustment amount, either savings or additional costs determined at year-end.

• Retirees' Health and Life Insurance costs reflect anticipated expenses for FY 2004 based on current actual expenses and slight growth in the number of retirees.

MISCELLANEOUS EXPENSES: These County expenses include: the refund of prior year taxes, rent, overhead charge-backs to some County agencies, the cost of the County's annual external audit and other consulting fees, national and state association memberships (NLC, NACO, VML, VACO) and other miscellaneous expenses not allocated to County departments.

• Beginning in FY 2003, refunds of earlier tax payments for Real Estate, Personal Property, Business Professional and other local taxes are being treated as revenue offsets, reducing the fiscal year local tax revenue by the amount of the refunds. This treatment of tax refunds is consistent with the County/Schools Revenue Sharing Agreement.

• Building rent includes lease-based increases and additional space (ninth floor) for Courthouse Plaza office and parking lot rental and leased office space for the Department of Economic Development.

• The consultant budget for FY 2004 has been increased to provide additional funding for financial services and federal lobbying efforts (contract increase).

• Pay enhancements reflect the funding for employer of choice enhancements approved in FY 2003. The increase merely shifts funding ($50,000) approved for the car allowance component from the Department of Human Services to Non-Departmental.

• Housing Projects reflect the costs of affordable housing projects funded from the Affordable Housing Investment Fund (AHIF) during FY 2002 and earlier years. The FY 2003 budget does not reflect any current year allocations from the AHIF. The AHIF contingent is shown in the next section at the approved budget amount for budget comparison purposes.

• Miscellaneous expenses are for the County's Flexfund program administration, which allows for pre-tax withholding for child care and health insurance expenses.

CONTINGENTS: The non-departmental accounts also hold the County Board's contingents. These contingents are appropriated funds established to cover unforeseen expense items or new projects initiated after a fiscal year has begun (General Contingent), for a particular purpose (Affordable Housing Investment Fund), or as a set-aside for future County Board decisions. For FY 2004, a $1,000,000 General Fund General Contingent is proposed, as well as a $4,000,000 Affordable Housing Investment Fund (AHIF) Contingent. The AHIF Contingent is supported with $1,170,000 in estimated federal HOME funds and $2,830,000 in local tax funds.

In order to fund premium increases for retirement and health insurance, a cost-of-living adjustment (COLA) or other compensation enhancements for County employees, a compensation contingent of $8,000,000 is proposed for FY 2004.

In FY 2003, the County Board approved funding of $4,163,524 from Local Public Assistance Cost Allocation Plan support (LPACAP) through the Virginia Department of Social Services. These funds must be used in support of human service programs. $520,718 was authorized for specific activities in the Department of Human Services in FY 2003; the balance of $3,642,806 was held in reserve, and allocated by the County Board in November 2002 as part of the allocation of LPACAP one-time funds.

The County Board also approved reserve funding of $520,168 to support full-year funding of strategic initiatives which were approved for partial year implementation in FY 2003. In addition, reserve funding of $2,800,000 was approved pending the sale of County land to the Navy League. This represents the anticipated revenue to the County resulting from the land sale. After the sale, these funds would be available for allocation by the County Board for one-time expenditures.

• No allocations from the General Contingent have been approved through December 2002.

• Allocations totaling $3,129,000 have been approved from the AHIF Contingent through December 2002.