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APPROVED 6/2/2009 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION March 5, 2009 7:00 p.m. The Orange County Board of Commissioners met for a Budget Work Session on Thursday, March 5, 2009 at 7:00 p.m. in the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Valerie P. Foushee, Vice-Chair Mike Nelson and Commissioners Alice Gordon, Pam Hemminger, Barry Jacobs, Bernadette Pelissier, and Steve Yuhasz COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: COUNTY STAFF PRESENT: County Manager Laura Blackmon, Assistant County Managers Willie Best and Gwen Harvey, and Clerk to the Board Donna S. Baker (All other staff members will be identified appropriately below) NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. 1) FY 2009-10 Budget Update a) Fiscal Outlook Laura Blackmon said that this is the first budget work session with department heads sitting at the table with the Board of County Commissioners to talk about some of the services that the departments have offered up for discussion. She made reference to the salmon- colored sheet entitled FY 2009-10 Budget Planning. Budget Director Donna Coffey updated the Board on revenues. The County department heads have submitted budget requests. She said that the current year's budget is $183 million. Of that total, $3.3 million is non—recurring revenue, which means that it will not be available this year. The $3.3 million is made up of$2 million in appropriated fund balance and $1.3 million in deferred capital projects. The recurring revenue for the current year is $179.7 million budgeted and she can depend on $174.3 million for next year. The loss of all of this together is $8.7 million starting out FY 2009-2010. She explained why there was such a difference in recurring revenue. She has assumed the Board's direction that there will be no tax rate increase over the revenue neutral rate. The natural growth in the real property has averaged 2.8% annually. She said that motor vehicle valuation is a huge concern. There is an $18 million loss in valuation compared to what was budgeted. This is in valuation and not in tax dollars. People are not buying new vehicles and are trading down. The last five months in billings have decreased consistently. She is assuming that this trend will continue. She estimates a 10% reduction in this revenue.