2013 BOCC Strategic Planning Conference – Day Three

Day three of the Board of County Commissioners’ Strategic Planning Conference focused on capital spending planning and priority setting.

Management and Budget Director Hyong Yi and Finance Director Dena Diorio briefed the Board on the list of priority capital projects approved by previous board for 2012, 2013 and 2014.

Historical Perspective
From FY2000 to FY2009 the County issued a total of $2.1 billion in debt. Over that same period, FY2000 to FY2009, the County incurred $2.6 billion in capital expenditures. Annual debt service increased by 115% during that same period. In 2008, departments were instructed not to enter into any contracts requiring capital dollars; capital projects in process were completed and no new projects were initiated; the County issued $191 million in debt and spent $60 million of pay-as-you-go funds to complete ongoing projects.  When spending stopped, the County still had $970 million in authorized projects.

The County adopted the following debt management strategies:

• Reduced debt issuance – “debt diet”
• COPS issuance eliminated
• Created debt service fund
• Capped long-term debt issuance $100 million per year
• Pay-as-you-go appropriations totaling three cents on the property tax rate
• No new authorizations for the medium-term

Those actions reduced outstanding debt by 19.3% and capital expenditures dropped considerably. Authorized and unissued debt was reduced by 49.1%.

Current – FY 2014 ranked capital projects total $111 million with total funding at $139.3 million

Next Steps
Capital project ordinances for projects ranked in FY2014 will be presented to BOCC for approval in March.  Staff will present financing strategies for FY2015 – FY2017. Continued adherence to financial and debt management policies is a must.

Priority Setting
Each year the Board determines its take on community priorities, ranking 48 County program categories into seven levels. Higher ranking doesn’t guarantee a program will get funded but the majority of County spending is on programs in the top three categories. Example: Charlotte Mecklenburg Schools funding, CPCC Education Funding and Debt Service are three program categories in Priority Level One.

• The Board approved moving Non-Communicable illness and Disease Prevention/Treatment from Priority Level three to Level One.
• Adult Mental Illness Prevention & Treatment from level three to Level Two
• Tourism from Level two to Level Three
• Historic Preservation from Level Seven to Level Six

All other program categories remain in last year’s Priority Levels.

 Workshop Topics
BOCC has requested and staff will attempt to schedule the follow topics during the Board’s scheduled workshops:

• Joint meeting with CMS
• Department Director introductions
• Community Service Grant overview
• Consolidated Human Services Agency
• HR Policy on termination
• Transportation & Economic Development
• DSS Operational Report
• Health Department Operational Report
• Job Creation
• STEM
• Entrepreneurial Think Tank
• Business Owners Foster Children’s Programs

Commissioner Bentley recommends that Chairman Cotham appoint several subcommittees to study the issues above rather than having the entire Board study each. Hyong Yi feels some of the topics may be best communicated to the Board with a written report from staff and he will recommend to the Board which ones may fall into that category.

2013 BOCC Strategic Planning Conference – PM Session

During the afternoon session, staff briefed the board on the County’s Community Vision, Community and Corporate Scorecard and current performance.

The vision adopted by the Board ten years ago, recently modified, is: “In 2015 Mecklenburg County will be a community of pride and choice for people to Live, Work and Recreate.” The previous Board also adopted the performance management system called Managing for Results (known in the corporate world as a balanced scorecard) which starts with goals, moves to corporate strategies and program alignment, budgeting for results and performance management. The County’s M4R is a national award-winning program recognized as a model for dozens of governments around the country. In 2011, the Board adopted a series of critical success factors to help guide the County Manager as he recommends an operating budget to the Board. Staff recommends that the Board consider special emphasis in FY14 on:

• Improving Quality of life in Neighborhoods (Park & Rec)
• Enhance Citizen Involvement (Advisory Committee Diversity)
• Sustain and Enhance the Environment (Water Quality Indices)

Commissioner James called attention to performance results of Charlotte Mecklenburg Schools and suggests that the Board consider more oversight and control over County dollars given to CMS in FY14 budget. Commissioner Dunlap reminded the Board that CMS is governed by its own elected Board and the BOCC has no authority to dictate what the CMS Board does with County money. Commissioner Ridenhour feels the public expects accountability for the money it spends on education. Manager Jones brought the conversation back to the balance scorecard and using data to make intelligent decisions.

Management and Budget Director Hyong Yi gave the Board a primer on the budget. FY13 budget is $1.433 billion, but after paying debt service and funding education services, Library, and Medic, there is $330 million left to fund all core County services, or 23.1 percent of the total budget. Since FY09, County population has grown 11 percent while the County budget has increased 3 percent and spending on County services is 7 percent less per capita than FY09.

Yi advises that there are some challenges facing the Board as it develops a budget for next fiscal year.

• Slow revenue growth due to economy
  • Property Tax
  • Sales Tax
  • Other Revenues
• Expenses rising faster than revenue
• Demand for services still high

Budget Manager Michael Bryant outlined the process for developing an operating budget starting with this Strategic Planning Conference, moving to public policy workshops, the Manager’s Recommended Budget  (May 21), the budget public hearing (May 30), BOCC straw votes and finally budget adoption on June 18.

The Board had a discussion about when they should get involved in creating a budget. They way it works now is that the Board tells the County Manager its priorities, then the manager recommends a budget based on those priorities. Commissioner James suggests a better system would be to have the Board tell the manager what the tax rate should be and then have the manager recommend the budget using that tax rate. Other Board members are satisfied that the Board has the time and ability to adjust the manager’s recommendation before they vote to adopt it.

Finance Director Dena Diorio gave the Board an update on FY13 revenues that are used to fund the current year operating budget. Property tax collections billed as of the end of December exceed $902 million with actual collections at 64.4 percent. Sales Tax revenue as of January 2013 is $165.7 million.

On Friday, the Board will discuss Capital Budget Planning and will engage in a process to determine their FY14 priorities. Those priorities will help the County Manager develop his recommended budget. View video of Wednesday & Thursday sessions.

2013 BOCC Strategic Planning Conference – Day two AM session

Day two of the Board’s Strategic Planning Conference focuses on the economy, budget planning, a report on current revenues and expenses and a look at the proposed budget calendar.

To kick it off, Dr. John Connaughton of UNC-Charlotte and Dr. Michael Brown of Wells Fargo talked about economic conditions facing the County.

Dr. Connaughton asked the question “Did we avoid the fiscal cliff?” Connaughton says no. Cutting spending or raising taxes won’t fix the problem. We need a healthier growth rate, somewhere near 3.5 percent. Deficit problem won’t go away without healthier growth. During the recession North Carolina lost 333,400 jobs during the recession and only gained back 46 percent of those during the recovery, though the six-county area around Mecklenburg recovered 77 percent of the lost jobs. Total income in Mecklenburg declined 15 percent since 2008 due to loss of jobs, especially in financial sector. North Carolina unemployment rate is fifth worst in the nation. North Carolina needs to focus on creating jobs as its number one job. Current negative economic indicators include consumer confidence, budget deficit, trade deficit and tax increases. There is potential things will get better in the second half of the year, perhaps 2.3 percent growth by the fourth quarter and an increase in the number of people buying homes. We should not be satisfied with 2 percent growth. Keys to watch are consumer confidence, consumer debt, excess reserves, job growth and gas prices. PowerPoint.

Dr. Brown agrees with Dr. Connaughton that we did not avoid the fiscal cliff. He says the new reality is that economic growth will remain at 2-2.5 percent for the foreseeable future. Education clearly makes a difference in whether a person is moving along with the new economic reality with college-educated workers suffering less unemployment and enjoying higher wages. A great many people have been unemployed so long that they have given up looking for work. We need better communication between employers and educational institutions so they are preparing students to become trained workers. He doesn’t feel that inflation is going to be a problem this year. Encouraging to see all job sectors growing in Charlotte with hospitality leading the way. Sees sub-par pace of economic growth nationally and in North Carolina. All indications are that improvement will happen in the 4^th quarter of 2013 and first half of 2014. Brown’s full Presentation.

There was a brief follow-up to Wednesday’s discussion and working agreement between the Board and staff. Items provide guidelines for members to follow with no means of assuring everyone follows the guidelines. Lee Institute says the exercise was good and establishes a starting point for everyone to work better together.

View video of the first day of the conference here.

2013 BOCC Strategic Planning Conference – Day One

The annual Strategic Planning Conference is a critical step in providing the elected officials with information and the guidance they will need to make important decisions about the future of Mecklenburg County.

Since there are four new Board members, staff invited Dr. Carl Stenberg of the School of Government at UNC-Chapel Hill to provide a brief overview of the Council-Manager form of government. Dr. Stenburg offered a list of habits of high-performing boards.
1. Thinking and acting strategically and with a vision for the community’s future.
2. Respecting the “shared constituency” with the citizens in horizontal and vertical relations with other jurisdictions.
3. Demonstrating teamwork.
4. Mastering small-group decision making.
5. Honoring the board-staff partnership.
6. Allocating board time and energy appropriately in four key areas – goal setting retreats, study sessions, regular public hearings and meetings, and community relations.
7. Having and following clear rules and procedures for board meetings.
8. Conducting systematic and assessment of policy and implementation performance.
9. Behaving in a manner that encourages citizen confidence in county government.

Dr. Stenberg cautioned the Board not to expect a smooth working relationship with staff after just a few meetings. He says it takes time to get to know one another and develop respect for one another.

Then Lee Institute President Cyndee Patterson facilitated a discussion between the elected officials and County staff on working effectively together. As an ice-breaker, Commissioners were paired with staff one-on-one to learn more about each other.
Patterson identified some of the most important components, values or rules of engagement for any successful team:
•Listening with an open mind
•Respecting others for what they bring to the discussion
•Be accountable
•Trust
•Honesty
•Communications
•Accepting of others’ views
•Knowledge that we are advancing the ball for the good of the entire community
•Personal needs are secondary to the needs of the group and larger community

Day one wrapped up with the Board and senior staff prioritizing recommendations for a Working Agreement between the two.

The Top 5 goals include: 1)minimal surprises 2) be more prepared for meetings 3)more face-to-face, less email 4) accept accountability, and 5) give the manager a chance to analyze and fix problems.

Day two of the conference starts at 9:00 a.m. Thursday. On the agenda: Discussion about the Community Vision and Corporate Scorecard, how to develop the FY2014 budget including a briefing from two noted economists, and a staff update on the County’s financial status including revenues and expenses.

2013 Strategic Planning Conference — Preview

The Mecklenburg Board of County Commissioners (BOCC) holds its annual Strategic Planning Conference on Jan. 30 – Feb. 1, 2013 at Foundation for the Carolinas in Charlotte. The purpose of the conference is to give commissioners the background and information they need to set County priorities for budgeting in the next fiscal year, FY2014. 

On Wednesday, Carl Stenberg , Ph.D., of the School of Government at UNC-Chapel Hill will provide a brief overview of the Council-Manager form of government in North Carolina. Then Lee Institute President Cyndee Patterson will facilitate a discussion between the Board and County staff on effective working relationships. 

On Thursday, the Board will receive an overview and discuss current economic conditions facing the County including a briefing from John Connaughton, Ph.D., professor at UNC-Charlotte, and Michael Brown, economist at Wells Fargo. Also Thursday the Board will:

• Receive a staff report on the mandatory/discretionary nature of County funding
• Receive information on how the annual budget is developed
• Receive a staff update on the FY2013 financial status including revenues and expenses
• Receive a briefing on the FY2014 operating budget calendar 

On Friday, Multi-Year Capital Planning is on the agenda. The Board will receive a staff update on the current capital program, including project status, projected available funding for the next several years, and a recommended strategy to best meet the needs of the County and its business partners.  And the Board will engage in a process to determine its FY2014 priorities. This process is an important precursor to developing the County Manager’s Recommended Budget. In addition, the Board will be asked to identify any topics related to the FY2014 budget it would like to discuss at Budget/Public Policy Workshops in February – April. 

Times and dates for the Annual Strategic Planning Conference: 

• Wednesday, Jan. 30 – 11:00 a.m. to 5 p.m.
• Thursday, Jan. 31 – 8:30 a.m. to 5 p.m.
• Friday, Feb. 1 – 8:30 a.m. to 3:30 p.m. 

Location:
Foundation for the Carolinas Silverman Pavilion
220 North Tryon Street
Charlotte, NC 28202 

All sessions are open to the public. This blog will be updated after each half-day session and video of all sessions will be available here. Real-time Tweets will be offered @meckcounty #meckbocc. Access to the full agenda and all documents the commissioners receive during the conference can be viewed at this special website.