Orange County NC Website
Browse       Search
• <br /> • 076 <br /> O R A N G E COUNTY <br /> V <br /> INTEROFFICE MEMORANDUM <br /> TO: Board Members and Board Members Ele <br /> FROM: County Manager ' <br /> SUBJECT: Fund Balance and Tax Base Trends <br /> DATE: October 29, x986 - <br /> The attached sheet was prepared by the Finance Director <br /> and is an update of an analysis prepared last year and <br /> submitted to the Board in a memo dated October 31, 1985. - <br /> As the analysis shows, fund balance available decreased <br /> significantly again during the year ending June 30, 1986'. <br /> This decrease was discussed in last year's memo and during <br /> the 1986-87 budget deliberations. Projections at the time <br /> were for fund balance to end the year at just over 6%._ We <br /> accordingly_ adopted a budget assuming that fund balance could - <br /> be restored tv an 8% level- over a two year peri©de Naw .it <br /> appears that a three year period will be necessary. The view <br /> of accomplishing it in two years was buttressed by the <br /> optimistic outlook at the time that revenue sharing, on a <br /> • partially funded basis, would be passed by both houses of <br /> Congress. As you now know, this did not occur. . <br /> The audit confirms our year end fund balance available <br /> to be 3.9% of the General Fund appropriation. To be below <br /> the 8% minimum recommended by the Local. Cove ent commission <br /> is an indication of financial weakness. It •u].d result in <br /> cash-flow problems in the future, especially if early steps . <br /> are not taken to begin to restore it to a higher level. <br /> Besides the fund's importance to meeting cash requirements <br /> the negative trend in the level of fund balance available <br /> • could affect the County's credit rating, resulting in a <br /> higher interest cost when bonds are issued. <br /> As a beginning step, I have put Into effect the <br /> following measures to reduce the level of expenditures <br /> through the year and thus increase the amount of <br /> underspending at year-end: (1) a delay in hirings, where <br /> possible, beyond the normal amount of time needed for filling <br /> Positions, (2) a closer examination of purchase requisitions <br /> to determine if a particular request can be delayed or <br /> Possibly eliminated, and (3) a delay on capital expenditures <br /> where possible. All of these steps will be carried out where <br /> they will not jeopardize the normal functions of the. County <br />