Agenda 01-17-23; 6-a - Allocation of $12 Million in Excess Fund Balance from FY 2021-22 through Budget Amendment #5-A

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5 As indicated on the above, General Fund revenues exceeded expenditures by$5.3 million for FY 2021-22. Additionally, the bottom line highlighted in green indicates a budgetary savings of$12 million in FY 2021-22.This $12 million is recommended to fund a December 13, 2022 Budget Amendment while achieving the County's current 16% Fund Balance Policy.The major budget versus actual variances are explained herein. FY 2021-22 General Fund- Budget versus Actual Results Property Tax Property tax favorable budget versus actual variance is a result of higher than budgeted collection rate. The budget assumed a 98.7% collection rate, and the Tax Administration Office posted a 99.4%collection rate. The County took a careful posture as this budget represented a revaluation year. Programs like the Long-Time Homeowners Tax Relief is another example of Federal ARPA relief and the favorable impact on the local economic base. Additional budget versus actual factors included additional natural growth and higher Motor Vehicle assessments. Sales Tax Sales tax favorable budget versus actual variance is due to several factors including the higher pricing on goods and services.The 2% local option tax (Articles 39, 40 and 42) applies to food and the food price index has exceeded the consumer price index during the current inflationary period.This coupled with impacts from the Federal Stimulus relief to residents and sustained e-commerce are part of the favorable revenue variance explanation. Another factor is the Hold Harmless Sales tax which replaced the State Medicaid revenue. The Hold Harmless exceeded the budget by$3 million with the remaining Articles 39, 40 and 42 accounting for$5.6 million over the budget. The NC State Treasurer has previously stated that local governments exercise conservative forecasting on the Hold Harmless sales tax revenue. General Fund Expenditures All of the Functional Leadership Teams were within the Board authorized budgets. The Budget versus Actual variance was 96.7%. This variance was primarily attributed to salary attrition and secondarily due to contractual obligations and other related non-personnel savings. The FY 2021-22 Budget included a $3 million attrition target which was exceeded. The 96.7% budget versus actual expenditure savings has been consistent with prior fiscal years. FY 2021-22 Estimated Fund Balance Classifications The FY 2021-22 Fund Balance classification has been reviewed with the County's Audit Managing Partner and should be consistent with the FY 2022 Annual Comprehensive Financial Report (ACFR) to be presented at the December 13, 2022 BOCC meeting. 2