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Kitsap budget memo

Kitsap budget memo

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Published by paulbalcerak
A memo from Kitsap County Director Shawn A. Gabriel in regard to the county's preliminary 2009 budget.
A memo from Kitsap County Director Shawn A. Gabriel in regard to the county's preliminary 2009 budget.

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Published by: paulbalcerak on Nov 21, 2008
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06/14/2009

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Department of Administrative ServicesKitsap County
 
614 Division Street, MS-7, Port Orchard, Washington 98366-4676Phone (360) 337-7150 • Fax (360) 337-7052
 
Shawn A. Gabriel, Director 
 
MEMORANDUM
To: Kitsap County Board of CommissionersKitsap County Elected Officials and Department DirectorsCounty EmployeesKitsap County CitizensMembers of the PressFrom: Shawn A. Gabriel, Director 
 
Date: November 19, 2008Subject: 2009 Kitsap County Preliminary Budget
Introduction:
We are pleased to present Kitsap County’s 2009 preliminary budget for the year endingDecember 31, 2009. The preliminary budget represents a collaborative effort by theBoard of County Commissioners, Elected Officials, and all County Staff, to produce aresponsible plan that balances our priorities with the resources available.We approach 2009 with caution as the nation’s economic downturn continues to impactour local economy and major revenue streams. Over the past year, we have witnessedan unanticipated depth of decline in sales tax revenue, new construction and consumer confidence which have dramatically changed our fiscal landscape. To manage thisunprecedented downturn, cost-saving measures were implemented to keep our expenditures in line with end of year revenue projections. More specifically, weinstituted spending and hiring freezes, limitations on travel and training, and reductionsin spending authority. Much of the revenue decline we face in 2009 is attributed to theextraordinary financial situation. Some of the expenditure reductions identified are one-time only savings to help us weather this downturn.As a result, the Board of County Commissioners has authorized the use of reserves inthe amount of $1,172,537 as an anti-recessionary measure to balance the general fundbudget shortfall and supplement the Department of Community Development’s shortfallin building permit revenue. The General Fund’s estimated fund balance remains abovethe reserve policy of 7.5% of revenue.
 
2The commitment to “live within our means” and to become more efficient, effective andinnovative could never be more apparent than now. To this end, with direction from theBoard of County Commissioners, we have encouraged all Departments and ElectedOffices to support the transition to a more defined program budget that measures theperformance of all County operations and the multitude of services we provide to thecommunity. A majority of Departments and Elected Offices have already identifieddivisions and/or segments of their operation as “programs” with associated revenues,expenses, staffing levels and performance measures categorized by “effectiveness”,“efficiency” and “workload” indicators. The performance budget will enable us tocontinuously improve services, strengthen our accountability, communicate results andprovide constructive information for effective decision making.Although the 2009 budget year may present some challenges, it is important that wecontinue to show due diligence as we operate under tight fiscal constraints. County staff should be commended for their hard work, dedication and fortitude in continuing to offer the quality services that County residents want and deserve.
Overview of the 2009 Preliminary Budget:
 In accordance with nationally recognized rules of governmental accounting andbudgeting, the County is financially organized into separate fiscal and accountingentities known as funds. All of these funds fall into one of six categories of funds asfollows:1)
General Fund
–finances the ordinary operations of the county not specificallyprovided for in any other fund.2)
Special Revenue Funds
 –Used to account for specific revenue sources that arelegally restricted to expenditures for specific purposes.3)
Debt Service Funds
– Accounts for the accumulation of resources for and thepayment of general long-term debt.4)
Capital Project Funds
–Acquisition or construction of major capital facilities.5)
Enterprise Funds
–Operations that are financed and operated in a manner similar to private businesses.6)
Internal Service Funds
–Finances goods or services provided by a departmentto other departments or agencies within the county.All of the funds in the 2009 Preliminary have been balanced. Attachment (1)summarizes the 2009 Preliminary budget by fund (expenditures only). In the GeneralFund we funded all positions at 97% of their full pay expecting that there will be acertain amount of vacant positions because of resignations and the time it takes torecruit new employees. The 2009 Preliminary Budget includes 93 funds broken downas follows:
 
3
# of ProposedFundsType of FundExpenditures1General Fund88,463,220$56Special Revenue Funds131,672,082 10Debt Service Funds11,008,187 6Capital Project Funds7,932,620 17Enterprise Funds67,066,760 3Internal Service Funds21,286,011 Totals93327,428,880$
We will begin our discussion with the county’s largest fund, the General Fund, and thenfollow on with discussions of other major funds.
 General Fund:
2008 has proven to be one of the most challenging budget years that we have ever faced. We are projecting a $2.8 million shortfall in sales tax revenues and an additional$1.8 million deficit in permit fees. The total impact to our general fund will be $3.3million less in revenues than we budgeted. To keep our expenses in line with thelowered revenues, we instituted various measures throughout the course of the year.In August 2008, Resolution 160-2008 was adopted to implement a hiring freeze andestablish procedures and guidelines for requesting exceptions to the hiring freeze. InSeptember 2008, Resolution 175-2008 was adopted to institute a spending freeze onspecific expenditure accounts. During this same time period, we identified efficiencymeasures that supported our efforts to reduce expenses. We adopted an Anti-Idlingand Fuel Conservation Policy (Resolution 172-2008) and County Vehicle Take HomePolicy (Resolution 173-2008). Limitations on travel and training were also instituted anda plan was developed by the Citizens Energy Conservation Advisory Committee toincrease energy use efficiencies and reduce consumption of energy services.We expect to begin 2009 with the same financial challenges due to the global financialchaos, decline in consumer spending and rising costs to conduct operations andprovide services to the community. The initial budget call letter had called for areduction of 2.2% to each county department and elected office for a total reduction of $1.8 million in general fund spending for 2009. That figure was based upon sales taxand other revenue predictions made in June of this year. New estimates, updated toreflect lagging licensing and recording fees as well as the drop in interest earnings,obligates the general fund to absorb further cuts of $4.1 million, for a total of $5.9million. Due to the drastic change in the projected shortfall, the Board of CountyCommissioners held a budget briefing in October 2008 with Elected Officials andDepartment Heads to entertain suggestions to address the shortfall.In early November, we generated a list of potential reduction initiatives to balance theprojected 2009 budget shortfall of $5.9 million. As a result, the Board of CountyCommissioners authorized several cost reduction measures, some of which result in

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