THE STATE OF THE COUNTY

Presented byALLEN COUNTY

COMMISSIONERS

WHAT DOES THE COMMISSION DO?

• Preside over budget matters; allocate funds to General Fund Offices and Departments

• Capital Improvements; maintain County owned buildings

• Ensure adequate public services for residents

WHAT DOES THE COMMISSION DO? (continued)• Oversee wise use of taxpayer dollars

• Forecast future needs; makes plans

• Strive to improve quality of life for citizens of the county

• Create opportunities for economic growth and development

WHAT COMMISSION CANNOT DO• CANNOT give raises or decrease pay of

employees in any Office or Department other than their own

• CANNOT lay off staff of any other Office or Department

• CANNOT mandate day/hours of operations for any other Office or Department

• CANNOT easily decrease hours or pay of classified employees. Must abide by Civil Service laws for government employees and have no authority over other Elected Officials’ employees

HOW THE COUNTY SPENDS YOUR MONEY  • Elected Offices & Departmental Budgets

(23)– Such as Sheriff, Treasurer, Recorder, Auditor,

Courts, Prosecutor, Veterans Services, Museum, etc.

• Pay off debt for Jail Construction, Court of Appeals, Civic Center expansion, and Eastown Road Expansion

• Capital Improvements– Building improvements, technology, sheriff’s

cruisers, etc.

HOW THE COUNTY SPENDS YOUR MONEY (Continued)• Economic Development• 911 System and Operators• Utilities, maintenance on County

owned buildings and grounds• Social Services

−Department of Job and Family Services mandate

−Indigent Defense

ACCOMPLISHMENTS• Paid off $5.285 million in General Fund debt for

the Industrial Park since 2003

• Fully funded a “Rainy Day Fund” called the “Reserve Fund” in the amount of $1.267 million between 2003 and 2004

• Implemented “Energy Savings Project” in 2009 for five County owned buildings to reduce energy costs – energy savings will pay for cost of project

• Reorganized Commissioners Office staff – permanently eliminated 2 full-time positions since 2002

2008 GENERAL FUND EXPENSES

Elected Offices and Departmental

Expenses equaled 68% of all County Expenditures

2008 GENERAL FUND EXPENSES

Criminal Justice and Courts equaled

55%of all County Expenditures

2008 GENERAL FUND EXPENSES

Employee wages and benefits equaled

66% of all County Expenditures

CURRENT FINANCIAL SITUATION• 2008 Economic recession

– Banking Industry failures

– Stock Market decline

– Interest Rates plunged

– Unemployment rates soared

CURRENT FINANCIAL SITUATION•Reductions in Income

– 2009 Sales Tax Receipts down $1 million since 2007

– Interest Income down $2.2 million since 2007

CURRENT FINANCIAL SITUATION•Reductions in Income (cont’d)– Expect a cut of at least $200,000 in

2010 in Local Government Funding from the State

– Elimination of Personal Property Tax – lost $324,000 since 2004

REVENUE HISTORY

$21,000,000

$22,000,000

$23,000,000

$24,000,000

$25,000,000

$26,000,000

$27,000,000

$28,000,000

2004 2005 2006 2007 2008 2009 Est2010 Est

$23,055,851

$23,957,959

$25,439,274

$27,555,458

$26,989,858

$25,403,387

$23,936,468

Revenue HistoryGeneral Fund

GENERAL FUND REVENUE BY SOURCE

Property Taxes (10.71%)

Charges for Services (13.48%)

Interest Income (8.41%)Other (2.52%)

Rental Income (2.75%)Repayment of Loans (1.79%)

Sales Tax (49.47%)Intergovernmental (10.88%)

2008 General Fund Revenue by Source

GROSS SALES TAX HISTORY

$12,000,000

$12,500,000

$13,000,000

$13,500,000

$14,000,000

$14,500,000

$15,000,000

2004 2005 2006 2007 2008 2009 Est.

$ 13,946,841

$ 14,446,159$ 14,404,857

$ 14,741,287

$ 14,062,496

$ 13,035,943

Gross Sales Tax History

CURRENT FINANCIAL SITUATION•Increases in Expenses

– Increase in Utility Costs for County owned buildings

– Unfunded Federal/State Mandates – Crippled Children’s Aid at $155,000; Tuberculosis Care at $5,500; Defense of Indigents at $1 million; Department of Job and Family Services at $575,000

CURRENT FINANCIAL SITUATION•Increases in Expenses (Cont’d)

– Maintenance on County Owned Buildings

– Liability Insurances

– Employee Health Insurance

−Increase of approximately $235,000 to Sheriff’s employee wages in 2009 due to union contract obligation.

GENERAL FUND EXPENSE

$22,000,000

$23,000,000

$24,000,000

$25,000,000

$26,000,000

$27,000,000

$28,000,000

20042005

20062007

20082009 Est.

2010 Est. before cuts

$23,903,306

$24,780,011

$26,394,668$26,186,945

$27,878,835

$25,905,211

$26,886,321

Expense History

A serious problem arises when expenditures exceed actual revenues.

Spending more than we take in also has an immediate, negative, and long lasting impact on our Carryover Balance.

GENERAL FUND CASH BALANCE

($3,000,000)

($2,000,000)

($1,000,000)

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

20042005

20062007

20082009 Est.

2010 Est. before cuts

$3,855,309

$3,032,390

$2,076,997

$3,445,509

$2,557,387

$2,066,801

($2,824,853)

Year-End Cash BalancesGeneral Fund

CASH FLOW CHART

($1,000,000)

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

20042005

20062007

20082009 Est

2010 Est before cuts

$3,855,298

$3,033,257

$2,076,996

$3,445,509

$2,556,531

$2,055,563

($883,052)

Cash + Revenue - Expense

NEGATIVE CASH FLOW• Negative Cash Flow from previous

slide $ 883,052

• Plus $2 million carryover cash balance needed $2,000,000

• Equals amount needed for 2010 budget in order to pass a balanced budget $2,883,052

WHAT’S ALREADY BEEN DONE IN 2009?General Fund Offices cut by 21% from

2008 appropriations− Auditor $ 164,543− Clerk of Courts $ 112,647− Commissioners $ 98,516− Board of Elections $ 94,720− Coroner $ 39,266− Recorder $ 69,742− Museum $ 62,923− Treasurer $ 55,340− Tax Map $ 34,609− Law Library $ 5,819

TOTAL $738,125

WHAT’S ALREADY BEEN DONE IN 2009? (CONTINUED)General Fund Offices cut 15% to

20% from 2008 appropriations− Juvenile Court and

Detention Center $ 508,297−Common Pleas Court $ 71,273−Probate Court $ 51,672−Domestic Court $ 41,410

TOTAL $672,652

WHAT’S ALREADY BEEN DONE IN 2009? (CONTINUED)General Fund Offices cut 0% to 15%

from 2008 appropriations

− Sheriff – Law Enforcement $ 492,064−Sheriff – Jail Operations $ 179,200−Building and Grounds $ 137,733−Miscellaneous $ 69,699−Prosecutor $ 41,803−Municipal Court $ 28,049

TOTAL $ 948,548GRAND TOTAL $2,359,325

WHAT’S ALREADY BEEN DONE IN 2009? (CONTINUED)Non-mandated agencies cut up to 100%:

$Cut %Cut − OSU Extension $ 267,374 100%– Civic Center $ 263,817 71%– Soil and Water $ 86,000 68%– Allen County Airport$ 85,140 100%– Regional Transit $ 75,000 100%– Crime Victims Svcs.$ 46,110 100%– Alvis House $ 41,350 100%– Allen County Fair $ 26,500 88%– LACNIP $ 500 100%

TOTAL $ 891,791

WHAT’S ALREADY BEEN DONE IN 2009? (CONTINUED)Budgets that Increased in 2009:• Utilities $ 239,435• Retirements/Severances $ 80,000• Liability Insurance $ 51,684• Veterans Services $ 48,729• Employee Insurances $ 18,477• Sex Offender Court $ 16,667• Election Day Expenses $ 10,750• Miscellaneous $ 317

TOTAL $466,059

WHAT’S ALREADY BEEN DONE IN 2009? (CONTINUED)• General Fund Elected Offices and

Departments Cut 21% $( 738,125)• General Fund Elected Offices and

Departments Cut 15 to 20% $( 672,652)• General Fund Elected Offices and

Departments Cut 3% to 15% $( 948,548)• Non-Mandated Agencies cut up to 100%

$( 891,791)• Budgets that Increased $ 466,059TOTAL DECREASE IN 2009 BUDGET

$(2,785,057)

WHERE’S ALL THE “EXTRA” MONEY?

• No employee raises except for the Sheriff’s union contractual increases of approximately $234,000 in 2009.

• Depleted the “Rainy Day” fund• Capital projects have been put on hold in

order to return that money to the General Fund

THERE IS NO EXTRA MONEY!

WHY ADDITIONAL CUTS?• Updated revenue projections show lower sales tax

collection

• State Budget cuts could cause a loss in Local Government Funding of at least $200,000 - $400,000 for Allen County

• Depletion of reserves and one-time dollars in the amount of $1,981,339

• Sheriff’s Union employees will receive contractual wage increase again in 2010 unless they vote not to take it. This would amount to approximately an additional $250,000 in 2010

OUR FINANCIAL GOALS

• Create a balanced budget as required by law – Ohio Revised Code 5705.39

• Re-fund the “Rainy Day” Fund to meet critical needs for future

• Restore funding to impacted Elected Offices, Departments, and Initiatives

WHAT ARE OUR OPTIONS?•Make further cuts

−Cut Elected Office and Department Appropriations by an estimated additional 16% or approximately $2.9 million

−Health Insurance•Raise Taxes

−2009 cuts of $2,785,057 + 2010 estimated cuts of $2,883,052 = $5,668,109 needed to bring services back to levels before cuts

Where does all this lead?

ALLEN COUNTY SALES TAX•February 4, 1970: .5% sales

tax enacted by Resolution

•February 10, 1987: .5% sales tax enacted by Resolution

•Current – Potential of .5% sales tax increase by Resolution

ALLEN COUNTY SALES TAX

• Currently at 6.5%

•Of the 6.5%, the State of Ohio keeps 5.5% and the

County only gets 1.0%

MEDIAN HOUSEHOLD INCOMEPer U.S. Census Bureau for Allen County:

Median Household Income = $37,048

Per Ohio Department of Taxation:31 – 35% of Income is Taxed

Cost of .5% sales tax increase:$37,048 x 33% x .005 = $61.13 annually

$61.13 divided by 52 = $1.18 weekly$61.13 divided by 365 = $.17 daily

MEDIAN FAMILY INCOMEPer U.S. Census Bureau for Allen County:

Median Family Income = $43,840

Per Ohio Department of Taxation:31 – 35% of Income is Taxed

Cost of .5% sales tax increase:$43,840 x 33% x .005 = $72.34 annually

$72.34 divided by 52 = $1.39 weekly$72.34 divided by 365 = $.20 daily

PER CAPITA INCOMEPer U.S. Census Bureau for Allen County:

Per Capita Income = $17,511

Per Ohio Department of Taxation:31 – 35% of Income is Taxed

Cost of .5% sales tax increase:$17,511 x 33% x .005 = $28.89 annually

$28.89 divided by 52 = $.56 weekly$28.89 divided by 365 = $.08 daily

RESIDENCY OF SPENDERS IN ALLEN COUNTY

Studies show that 51 – 52% of retail sales originate from

shoppers who live outside of Allen County

STATEWIDE SALES/USE TAX RATES

Total of 88 Counties in Ohio7.0% tax rate or above – 58

Counties or 66%6.5% tax rate - 24 Counties or

27%6.25% tax rate – 5 Counties or

5.7%6.0% tax rate – 1 County or 1%

AVERAGE ANNUAL COST OF NEW TAX

$72.34 annually per family$1.39 weekly per family

$.20 daily per family

$61.13 annually per household$1.18 weekly per household

$.17 daily per household

$28.89 annually per capita$.56 weekly per capita$.08 daily per capita

SALES TAX

Sales tax receipts for 2008 totaled $13,351,086 and were projected to be 15% less, or

$11,350,000 in 2009. Based on current economic conditions, it

is appropriate to suggest no increase will occur in 2010.

SALES TAX

A one-half or .5% increase in the sales/use tax for 2010

would increase the General Fund by approximately $5

million.

PLAN OF ACTION

5 specific priorities have been addressed in order of

importance .This “Plan of Action” recognizes

essential services as the first order of need, yet provides

equitable response to the other pressing needs of the County.

PLAN OF ACTION – YEAR 1

YEAR 11ST Priority - $2 mil. to supplement revenue; protect

safety services, courts, prosecution from further cuts

2nd Priority - $550,000 to replenish 50% of “Rainy Day” fund to insure against future catastrophic events

3rd Priority - $1.2 mil. to restore 50% of 2009 cuts to Elected Offices and Departments

4th Priority - $446,000 to restore 50% of 2009 cuts to Non-Mandated Agencies or “Zero Funded Groups”

5th Priority - $804,000 to fund delayed capital projects

PLAN OF ACTION – YEAR 2

YEAR 21ST Priority - $2 mil. to supplement revenue; protect

safety services, courts, prosecution from further cuts

2nd Priority - $550,000 to replenish 50% of “Rainy Day” fund to insure against future catastrophic events

3rd Priority - $1,683,000 to restore 70% of 2009 cuts to Elected Offices and Departments

4th Priority - $624,000 to restore 70% 2009 cuts to of Non-Mandated Agencies or “Zero Funded Groups”

5th Priority - $143,000 to fund delayed capital projects

PLAN OF ACTION – YEAR 3

YEAR 31ST Priority - $2 mil. to supplement

revenue; protect safety services, courts, prosecution from further cuts

2nd Priority – $2,160,000 to restore 90% of 2009 cuts to Elected Offices and Departments

3rd Priority - $803,000 to restore 90% 2009 cuts to of Non-Mandated Agencies or “Zero Funded Groups”

PUBLIC TESTIMONY

PUBLIC SUPPORTING TAX INCREASE

PUBLIC TESTIMONY

PUBLIC OPPOSING THE TAX INCREASE

PUBLIC TESTIMONY

OTHER PUBLIC COMMENTS

STATE OF THE COUNTY

ADJOURN

NEXT PUBLIC HEARING7:00 P.M. JULY 20, 2009