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2 <br />ORANGE COUNTY <br />HILL- SBOROUG H <br />NORTH CAROLINA <br />✓,y1�r� &rta"sired >7s2 <br />TO: Board of County.Commissioners <br />FROM: John Link, County Manager <br />SUBJECT: Current Year Estimated Revenues and Expenditures <br />DATE: March 17, 1992 <br />The Budget staff has completed a detailed analysis of our current <br />year general fund budget. From this analysis it appears that, <br />excluding the fund balance appropriated, expenditures will exceed <br />revenues by approximately $100 - 200,000. This is good news <br />considering that we have faced two major losses in revenue: State <br />paid local option sales taxes and lower than anticipated earnings <br />on our investments. <br />Over the past several years, revenues have exceeded expenditures <br />each year ranging from $2.8 million in 1987 -88 to $425,000 in 1990- <br />91. This pattern has helped achieve the goal established in 1987 <br />by the Board of Commissioners to increase the amount of fund <br />balance to a minimum level of eight percent of the total general <br />fund budget. <br />we are projecting one cent local option sales tax revenue (which <br />represents sales tax collected and disbursed in orange County) to <br />fall short of the budgeted amount by approximately $700,000. This <br />shortage is due primarily to State agencies now exempt from paying <br />local option sales tax. On the other hand, the two one half cent <br />sales taxes, which are sales tax revenues collected Statewide and <br />disbursed to orange County based on our percentage of Statewide <br />population, are projected to exceed the budgeted amount by $200,000 <br />(see Figures 1A and 1B). The current Board policy transfers the <br />full amount of the two one half cent sale tax revenues to capital <br />projects. In this report we have shown the full amount being <br />transferred to capital projects, although the Board may wish to <br />consider altering this policy at some later date. <br />The other major revenue source which will fall short of the <br />budgeted amount is investment earnings. Last spring when the <br />budget was prepared, interest rates were approximately 7 percent, <br />and projected to continue in this range. Currently we are earning <br />approximately 4.5 percent on our investments. It appears that we <br />will realize approximately $500,000 in general fund investment <br />earnings, which is about $300,000 less than the amount budgeted. <br />AREA CODE (919) 732 -8181 • 968 -4501 • 688 -7331 • 227 -2031 • FAX (919) 644.3004 <br />Ext. 2300 <br />