COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

Follow up on Outstanding FY 2010 County Budget Issues

 

 

SUBJECT/PROPOSAL/REQUEST:

Information on Jaunt and Woods Edge funding requests for Fiscal Year 2010.

 

 

STAFF CONTACT(S):

Messrs. Tucker, Foley, Elliott and Davis

 

 

LEGAL REVIEW:   No

 

AGENDA DATE:

April 1, 2009

 

ACTION:     X          INFORMATION:   

 

CONSENT AGENDA:

  ACTION:              INFORMATION:   

 

 

ATTACHMENTS:   No

 

 

 

REVIEWED BY:

 

 

BACKGROUND:

During the Board’s March 11, 2009 work session on its proposed fiscal year 09/10 operating budget, staff was requested  to provide clarification on funding requests for JAUNT and Woods Edge as well as the recommended Capital Improvement Plan.  The Board requested information from JAUNT on how the County’s annual funding allocation is determined, how this agency is addressing its current year operational funding, and also sought data related to the County’s ridership and previous funding allocations.  In terms of Woods Edge, the Board was interested in knowing whether the County could continue its $40,000 annual allocation for rent subsidies for this senior living facility.  Finally, the Board requested that the CIP Oversight Committee take a second look at several capital projects and clarify their previous recommendations.

 

STRATEGIC PLAN:

Goal 5:  Develop a comprehensive funding strategy/plan to address the County’s growing needs

 

DISCUSSION:

 

JAUNT

Annual JAUNT funding allocations are determined by calculating the percentage of County service hours, net of agency related hours, to all JAUNT system service hours. This percentage is applied to JAUNT’s budget for administration, operations, and local match of capital expenditures.  Projected revenues are then subtracted from this calculation.  Revenues are determined as follows:

o        Fares  - generated from projected County trips

o        Federal Revenues

§         Urban - percentage of County urban trips to total urban trips is applied to anticipated revenue

§         Rural – one-half of projected rural expenses minus projected fares

o        State – service hour percentage is applied to anticipated State funding

o        MPO – urban trips percentage is applied to anticipated funding

 

The County’s percentage of total system service hours for FY10 is projected to be 42.8% yielding the following funding allocation:

 

Administration               $   450,330        42.8% of JAUNT’s total budget

Public Operations          1,494,795         42.8% of JAUNT’s total budget

Capital                                13,472        42.8% of local required match

Total                             $1,958,597

 

Less Revenues:

Fares                      $   184,650

      Federal                         215,003     Urban (47.4% of allocation)

                                           347,878     Rural (one-half of expense less fares)

      State                            332,929       42.8% of total JAUNT allocation

      MPO                                 1,695      47% of JAUNT allocation

County Match:                 $   876,442

 

The following table provides data related to the County’s growth in terms of trips and funding for the period FY04-FY10. During this period, the County has experienced a 37.9 percent increase in total trip hours while its funding commitment to JAUNT has increased 97.6 percent.

 

 

The rationale for JAUNT’s requested funding increase is largely grounded in this agency’s FY09 funding proposal.  For FY09, JAUNT anticipated an increase in ridership primarily in rural areas where federal funds cover half the cost. Ridership has expanded beyond anticipated projections however this is primarily occurring in the urban area where JAUNT receives no additional federal dollars.

 

In addition, the state indicated to JAUNT that it would receive an increase of $133,075; therefore, it requested only a 4.3 percent increase in FY09 funding from all localities not seeking new services. As it turns out, the state actually reduced its funding to JAUNT by $73,400 and will eliminate an additional $99,295 in FY 10 (Albemarle’s share of this cut is $42,697).

 

Another factor contributing to JAUNT’s increase in expenditures is a dramatic shift in its employee turnover.  Historically, employee turnover for JAUNT averaged 25 percent per year creating savings that were captured in its funding requests.  Since the economic downturn has occurred, JAUNT’s employee turnover rate has fallen to 8 percent.  This decrease in turnover has increased salary and fringe benefit costs by approximately $110,000.

 

JAUNT has addressed its FY09 shortfall through savings in budgeted fuel expenditures and through the reallocation of remaining state funds from localities that are not realizing projected service increases to those that are, including Albemarle.

 

Woods Edge

On March 10, 2009 JABA submitted a request to the County of Albemarle to continue its $40,000/year rental assistance to Woods Edge Senior Apartments.  The assistance was pledged by the County in 2000 for eight years to enhance Fore Woods Edge L.L.L.P.’s application for Housing Tax Credits in an application to the Virginia Housing Development Authority.  The County’s commitment for rental assistance expires on June 30, 2009 and JABA has requested that the Board enter into a new agreement that could potentially extend its funding commitment through the expiration of the federal tax credits (7 additional years).

 

Based upon the terms of the above contract, the County Executive’s FY10 budget did not include this $40,000 funding request; however, the Board could fund this request through the FY10 Housing Fund appropriation.  This will reduce new funding available for down payment assistance; however, it is anticipated that some funding will remain available from FY09 down payment assistance which can be reappropriated for this use as demand warrants. While $280,000 is expected to be utilized in down payment assistance in the current year, a balance should exist in the fund due to the use of cash proffers received for North Pointe.

 

Should the Board agree to fund JABA’s request, it is recommended that the County enter into a new agreement with the following minimum terms and conditions:

 

·         The term of the agreement would be for seven years subject to annual appropriation and funding would be for up to $40,000/year. 

·         If an existing tenant were to move out of the unit, the County’s subsidy would no longer inure to the benefit of that unit and the subsidy would be reduced and not transferred to another unit.

·         JABA would continue to file quarterly reports with the County. In addition, JABA would file an annual financial report (unaudited) to allow for reconciliation of funds disbursed/used.  The reconciliation would be used to either recapture unused funds or reduce a future year's appropriation. 

·         A non-appropriation’s clause would be provided and JABA will notify each tenant receiving assistance that there is no guarantee that assistance will continue beyond one year.

 

This proposal does not require finding additional funds in the budget and will likely have minimal impact on the County’s down payment assistance program if funds can be reappropriated at the end of the current fiscal year.  Also, phasing out the assistance as tenants move and with JABA communicating and working with tenants to budget for future rent increases financial impacts should be minimized when this assistance is no longer available. 

 

CIP Oversight Committee

In accordance with the Board’s directive, staff convened a special meeting of the CIP Oversight Committee on March 24, 2009.  Pursuant to the Board’s request, the committee reviewed background information and engaged staff in discussion regarding the following four project areas, 1) Fire apparatus replacement schedule and policy; 2) Neighborhood Plan Implementation program; 3) School Gymnasium HVAC and Lighting replacement; and 4) School Maintenance/Replacement program. A brief summary of the Committee’s findings is as follows:

 

Fire Apparatus:

While certain purchases may be deferred, it was acknowledged that such deferment would not impact FY 10 since the purchases were debt financed.  The committee also felt that any proposed adjustments must be considered within the context of the 5 year replacement plan.  Finally, it was suggested that the fire department reconsider its policy as regards rotation of equipment.

 

Neighborhood Plan Implementation:

The Committee acknowledged that the program is consistent with the Board’s commitment to accumulate funds to implement approved master plans.  One member of the committee suggested that funding proposed for FY 10 could be reduced, but there was no general agreement among the committee to do so.

 

School Gymnasium HVAC/Lighting:

School staff described this effort as part of a multi-year, ongoing commitment to upgrade 11 facilities to provide suitable and safe environments for students and for use by the County’s recreation programs.   Some members acknowledged that these improvements may be considered “enhancements”, but there was no general agreement among the members to discontinue or delay the projects. 

 

School Maintenance:

School staff outlined the magnitude and details of the maintenance program, emphasizing that 27 school building remain in excellent shape, despite age due to proper maintenance.  The committee agreed that the maintenance program should not be reduced at this time. 

 

Other general comments of the committee:

 

A full discussion of the CIP process and the specific role and structure of the Technical Review Team and the Oversight Committee will be the subject matter of a Board Work Session to be scheduled this spring/summer.  

  

BUDGET IMPACT:

JAUNT:  As directed by the Board during its budget work session, $150,950 has been set aside in the Board’s contingency to potentially fund JAUNT”s requested FY 2010 increase pending further review.  Funding was made available through a reduction in the capital transfer and a correlating offset in capital project funding for the VDOT Road Revenue Sharing project. 

Woods Edge:  Funding $40,000 to continue the Woods Edge rental subsidy can be realized through a reduction in the down payment assistance funds as described above, having minimal impact on the assistance program, and requiring no additional funds.

Capital Improvements Plan:  No additional reductions or changes were recommended by the CIP Oversight Committee.

 

 

RECOMMENDATIONS:

Based upon the above information, staff recommends the Board consider JAUNT’s full FY 2010 request of $876,442.  This is $150,950 more than currently in the proposed budget for JAUNT.  Staff also recommends the Board approve the request to continue the Woods Edge rental subsidy, with funding provided through a $40,000 reduction in the proposed budget for the down payment assistance program.

 

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