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0004 MINUVES ORANGE COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING NOVEMBER, 4, 1985 The Orange County Board of Commissioners met in special session on November 4, 1985 at 4:30 p.m. in the Board of Commissioners Room in the Orange County Courthouse, Hillsborough, North Carolina. COMMISSIONERS PRESENT: Chair Willhoit, and Commissioners Shirley Marshall, Moses Carey, Ben Lloyd and Norman Walker. AM101M PRESENT: Geoffrey Gledhill. STAFF PRESENT: County Manager Kenneth R. Thompson, Director of Finance Gordon Baker, Deputy Finance Officer Ken Chavious, and Clerk to the Board Beverly A. Blythe. 1_._ AUDIT REPORT FOR YEAR ENDED JUNE 30, 1985 Gordon Baker noted the fund balance available, as indicated in the report, indicates a decrease of $860,000 for the year. The expenditures in excess of revenues for the year totaled approximately $300,000, and $500,000 was moved from available to reserved by State statute. The increase in reserved was the result of an increase in receivables. This will have an impact on the budget for the year 1986-87. Mitch Mumma, Audit Supervisor with Touche Ross, Inc., explained that reserved by state statute represents the amount of revenue that has been recognized on an accrual basis for financial statement purposes but it is not available for appropriation. The statute makes reference to what is available which is cash minus all payables, deferred revenues and anything else that is encumbered. The difference between total fund balance and what is available is reserved by state statue. The receivables from the Federal Government and the State of North Carolina represents the entire reserved amount. This is money that has been recorded as revenue in the year ended June 30, 1985 that has yet to be received. That figure is high because the 1/2 cent sales tax is included. Mitch Mumma noted that the theory behind the money not being available is that the cash is not on hand and there is a separate reserve for encumbrances. One hundred percent of the property taxes receivables are not recognized as revenue but are reserved in the line item deferred revenue. It is an issue of timing because the money recorded as revenue in the year it is received and is not available for appropriation. Commissioner Marshall indicated the three sources of funds which are not available for appropriation but which can be used. They are (1) reserved by State statute which is money that cannot be appropriated but used in a shortfall, (2) fund balance designated for the subsequent years expenditures which is not likely to be used for a specific expense, and (3) undesignated amount that is not designated. Mitch Mumma stated there is an unreserved source from which the Board of Commissioners make a decision on the amount needed to balance the budget. Commissioner Marshall questioned if too much money was being held back in the budget which ultimately cost the people in Orange County. Commissioner Carey questioned if too much money was being held in the undesignated account.