2009-2010 County Budget Workshop Department for Local Government Office of Financial Management Administration

1. 2009-2010 County Budget WorkshopDepartment for Local GovernmentOffice of Financial Management & Administration

2. Introductions

4. Legislative Update

5. Budget Workshop

6. Budget Timetable Page 4 January List of delinquent fee office budgets List of delinquent fee office budgets

7. Approving as a whole, fiscal court may put spending caps on the total budget but it must be stated in the order Auditors will go by what is in the fiscal court order; if no caps, then fiscal court COULD be responsible for covering overspending.Approving as a whole, fiscal court may put spending caps on the total budget but it must be stated in the order Auditors will go by what is in the fiscal court order; if no caps, then fiscal court COULD be responsible for covering overspending.

8. Setting Maximum Amount for Fee Office Deputies and Assistants KRS 64.530 states: The Fiscal Court shall fix annually the maximum amount including fringe benefits which the county clerk and sheriff may expend for deputies and assistants. Form available*

10. Approving Fee Office Budgets Amount budgeted to receive from fiscal court: Sheriff’s budget = Line 11 Clerk’s budget = Line 4 If fiscal court pays for an item out of fiscal court budget, same item should not be listed in lines 4 & 11. Examples follow this slide.Examples follow this slide.

11. Fee Official Support Fiscal Courts may support fee official’s expenses through the payment of claims presented to the fiscal court and paid from a properly budgeted line item in the county budget. Lump sum payments (i.e. prior year excess fee reimbursement to the fee official) are prohibited. KRS 64.710

12. Where to look on a fee office budget to find out how much money they expect to receive from the fiscal court.Where to look on a fee office budget to find out how much money they expect to receive from the fiscal court.

14. February

16. April

17. May

18. Budget Timetable

19. This time line suggests the latest point in time that each step should be done. You may complete the budget preparation and adoption ahead of the time shown here. We do have at least one county that usually has their budget adopted by as early as March.This time line suggests the latest point in time that each step should be done. You may complete the budget preparation and adoption ahead of the time shown here. We do have at least one county that usually has their budget adopted by as early as March.

20. Estimating receipts Estimating expenditures Filling out the budget forms Chart of accounts Revenue and expenditure particulars Additional documentation Budget Preparation

21. Estimating ReceiptsPages 21 – 24 Utilize the 6/30/2008 quarterly Compare to the most recent quarterly report (3-31-09 electronic report) Check with the treasurer, the jailer, other elected officials budgets Other sources...

22. Estimating ReceiptsPages 21 -24 Be sure to consider whether your fiscal court has adopted the increased court costs. Must be done by ordinance.Be sure to consider whether your fiscal court has adopted the increased court costs. Must be done by ordinance.

23. Estimating ReceiptsUse Current Year Figures!

24. Estimating ExpendituresPage 26 Check the most recent electronic quarterly report Check the 6/30/2008 report Get budgets, financial statements, contracts, agreements, etc.

25. Estimating ExpendituresPage 26 Check with the treasurer, department heads, other offices, fiscal court… Was there anything mentioned during the proposed use hearings for LGEA and CRA that needs to be included? Check the fee office budgets

26. Unpaid Claims Counties are discouraged from carrying over unpaid obligations into the next fiscal year due to the fact that, under KRS 65.140, counties are required to pay all bills for goods and services within 30 days of receipt of an invoice.  However, if a county must carry over an unpaid obligation, the county MUST budget for the complete payment of this obligation within the upcoming fiscal year.  ALL unpaid obligations of any kind must be included in the county’s budget.

27. $$ Budgeting Cash TransfersPage 22 Transfers from Road Fund would include the amounts calculated on the Road Cost Allocation worksheet or amounts borrowed by the General Fund for repayment before June 30. Don't forget that Road Fund monies are restricted and all money must be repaid to the Road Fund except the Road Cost Allocation amounts.Transfers from Road Fund would include the amounts calculated on the Road Cost Allocation worksheet or amounts borrowed by the General Fund for repayment before June 30. Don't forget that Road Fund monies are restricted and all money must be repaid to the Road Fund except the Road Cost Allocation amounts.

28. Fund to Fund Appropriation Transfer --01-9200-999 (10,000) --01-9300-999 10,000 --01-9300-999 (10,000) --03-9200-999 10,000

29. Liabilities Page 25 is the required budget form for showing outstanding debt and debt service Appropriating for debt service is a mandate (Notification required) The liabilities section and the appropriations sections must tie together. Include account codes! Make sure quarterly report includes issue dates for all liabilities as well as date report was submitted. Budget liabilities page includes a line for the total amount due this budget. Quarterly liabilities page includes a line for the date next payment is due. If it's shown in the liabilities section, it must also be shown in the appropriations section to be paid back.Budget liabilities page includes a line for the total amount due this budget. Quarterly liabilities page includes a line for the date next payment is due. If it's shown in the liabilities section, it must also be shown in the appropriations section to be paid back.

30. What will the state local finance officer be looking for before he approves the proposed budget? HANDOUT Math check -- Balanced Budget Do we have a copy of the fee office budgets approved by fiscal court? Are all mandated expenditures included in budget Correct account codes Excess fees from fee offices Restricted funds Standing Orders Tax Rates HANDOUT Math check -- Balanced Budget Do we have a copy of the fee office budgets approved by fiscal court? Are all mandated expenditures included in budget Correct account codes Excess fees from fee offices Restricted funds Standing Orders Tax Rates

31. Revenue Sources Pages 11 - 13 General purpose revenues Restricted revenues Be sure restricted revenues are appropriated accordinglyBe sure restricted revenues are appropriated accordingly

32. Page 5KRS 42.455 prohibits expenditure of LGEA funds for administration of government The only exception is to pay law enforcement officers while performing law enforcement duties. Time sheets must be kept to verify amounts paid from LGEA funds.The only exception is to pay law enforcement officers while performing law enforcement duties. Time sheets must be kept to verify amounts paid from LGEA funds.

33. Coal impact Coal severance Mineral severance -uses will be addressed later in presentation ALLOWABLE USES FOR LGEA FUNDS DEPENDS UPON THE SOURCE

34. The county’s status may change during the fiscal year Coal Producing Coal Impact Status can change each quarter. Will be sent notification if status changes. If you are a county whose status has a tendency to change occasionally, budget accordingly.Status can change each quarter. Will be sent notification if status changes. If you are a county whose status has a tendency to change occasionally, budget accordingly.

35. COUNTY ROAD AIDKRS 177.320 These funds are for the construction, reconstruction and maintenance of county roads and bridges Municipal Road Aid 02-4519 RESTRICTEDRESTRICTED

36. CRA 2009-2010 Figures* Available for review at your leisure 60% allocation available Aug 1.

37. Mandated Appropriations

38. Mandated Appropriations Elected officials’ salaries County Judge/Executive Jailer (if county operates a full service jail) KRS 64.5275 Jailer (if county does not operate a full - service jail) KRS 441.245 KRS 64.5275 was amended by SB 396 in 1998KRS 64.5275 was amended by SB 396 in 1998

39. Mandated Appropriations Sheriff and Clerk : (if county fee pools or pays salary through county budget) 1/12 of Fee Officer’s Salary shall be paid monthly KRS 64.535 (HB 810) County Attorney (if fiscal court has set a salary)

40. Mandated Appropriations Commissioners/Magistrates Coroner Constable (if paid a salary) Salaries for statutorily mandated appointments including the road supervisor, the county treasurer and the dog warden.

41. Mandated Appropriations

42. Mandated Appropriations Retirement currently 7.17 for non hazardous and 16.78 for hazardous Will change to new rates July 1Retirement currently 7.17 for non hazardous and 16.78 for hazardous Will change to new rates July 1

43. Mandated Appropriations

44. Mandated Appropriations

45. Mandated Appropriations Between $600 and $1200 annually to the Circuit Clerk for county law library. KRS 172.110 (1)

46. Mandated Appropriations Budget for primary election in May 2002 If the 30% is not spent in one fiscal year, it must not lose its identity when carried over to the next fiscal yearBudget for primary election in May 2002 If the 30% is not spent in one fiscal year, it must not lose its identity when carried over to the next fiscal year

47. Mandated Appropriations

48. 12.5 cents per capita for the public defender -- KRS 31.185 (2) Cost of interdisciplinary evaluation report if court ordered. KRS 387.540 Mandated Appropriations If the certified census information is received by the Dept. of Finance by July, then the 12.5 cents per capita will be based on the new population figures. If the certified census information is not received by the Dept. of Finance by July, then the amount will be the same as last year’s.If the certified census information is received by the Dept. of Finance by July, then the 12.5 cents per capita will be based on the new population figures. If the certified census information is not received by the Dept. of Finance by July, then the amount will be the same as last year’s.

49. Additional Items to Consider All categories of tax revenue to be estimated and reported separately. Utilization of minor codes 499 and 599 for miscellaneous is limited to $1000 per function code. Auditors will comment if an excessive amount is appropriated to miscellaneous.Auditors will comment if an excessive amount is appropriated to miscellaneous.

50. Road Cost Allocation Worksheet Pages 30 - 31 Allowable administrative costs Percentage of Road Fund to Operating Budget excluding Grants Maximum allowable..

52. The Signature Page of the Budget Document (Page 27) State local finance officer signs as to form and classification

54. Other items that could delay budget approval by the SLFO Quarterly reports current Fee office budgets submitted Adopted Amendments Tax Rates (Page 28) 2008 – 2009 Adopted Budget on File

55. Newspaper Advertisements KRS Chapter 424 QUALIFICATIONS: 1) Newspaper maintains its principal office in the area 2) Newspaper is published regularly, as frequently as once a week and has been so published in the area for the immediately preceding two-year period 3) Newspaper shall bear a title or name and consist of not less than four (4) pages without a cover 4) If, in a publication area there is more than one (1) newspaper which meets the above requirements, the newspaper having the largest bona fide paid circulation 5) If, in any county there is no newspaper meeting the requirements of this section for publishing advertisements for that county, advertisements shall be published in a newspaper of the largest bona fide circulation in that county published in and qualified to publish advertisements for an adjoining county in Kentucky TIMES: No less than 7 nor more than 21 days prior to 2nd reading RATES: No larger than seven (7) point type on solid leadingQUALIFICATIONS: 1) Newspaper maintains its principal office in the area 2) Newspaper is published regularly, as frequently as once a week and has been so published in the area for the immediately preceding two-year period 3) Newspaper shall bear a title or name and consist of not less than four (4) pages without a cover 4) If, in a publication area there is more than one (1) newspaper which meets the above requirements, the newspaper having the largest bona fide paid circulation 5) If, in any county there is no newspaper meeting the requirements of this section for publishing advertisements for that county, advertisements shall be published in a newspaper of the largest bona fide circulation in that county published in and qualified to publish advertisements for an adjoining county in Kentucky TIMES: No less than 7 nor more than 21 days prior to 2nd reading RATES: No larger than seven (7) point type on solid leading

56. AMENDMENTS Pages 44 - 49 Simple five step process Include documentation

57. Emergency Amendments KRS 67.078 Requires only one reading by FC Does not require SLFO signature Emergency must be declared in Fiscal Court meeting and reflected in the minutes

58. Chart of accounts Pages 88 – 103 Required books of accounts Pages 50-53 Purchase order system Page 54 Uniform System of Accounts

59. Uniform System of Accounts (page 47 through 61) Inventory of county property Pages 55-60 Minimum requirements Page 61 Jail commissary fund instructions Pages 62-66

60. County Property Tax RatesPages 77 - 78 Two Tax rates are calculated by DLG 1. Compensating Rate Generates approximately the same revenue as the previous year exclusive of new property. Rounded to next higher one - tenth of one cent.

61. County Property Tax Rates 2. 4% Rate increase Generates four percent more revenue than compensating rate Requires hearing process Rounded down to next one-tenth of one cent Rate in excess of 4% is subject to recall

62. Tax Rate Calculation Process County PVA sends assessment information to DOR DOR certifies assessment and gives to DLG DLG calculates compensating and 4% real property rates within 48 hours and mails information to county County has 45 days from date of DOR certification to set real rate as well as calculate and set personal rate

63. County Property Tax Rates Hearing Process (KRS 68.245) Required for any rate above the compensating rate Advertise at least twice in two consecutive weeks in newspaper with largest circulation in the county, OR; Mail notice of hearing to every property owner in the county

64. Sample Advertisement on page 78

65. Occupational and Insurance TaxesPages 84 - 85 Occupational Taxes may be implemented at any time during the year Insurance Premiums Taxes must be implemented by March 23rd and begin on the following July 1. Estimates for occupational tax are available through DLG Occ Tax: Counties with populations over 30,000 must credit cities within county that have an occupational tax Insurance Tax: Regardless of population, county must credit cities with tax Department of Insurance Contact: Brenda Smith 502-564-1649 or 800-595-6053

66. Important dates: April 1 Proposed jail budget to FC May 1 Entire proposed budget to FC

67. June FC must have met to consider budget by June 1 Review of administrative code July 1 Must have adopted budget

68. County Debt Short-Term Borrowing Act Governmental Leasing Act County Debt Capacity

69. Short-Term Borrowing Act Page 82 Requires notification to the state local debt officer (SLDO) PRIOR to borrowing SLDO approval not required Must amend to reflect the receipt and repayment of the borrowed money Must be repaid by the end of the fiscal year in which the money was borrowed Reported on the liabilities section of the quarterly financial statement

70. Notification of lease issues less than $200,000 is not required, however, is strongly recommended by SLDO Notification to SLDO of lease issues of $200,000 or more is required SLDO hearing and approval required for all lease issues of $500,000 or more All lease issues are reported on the liabilities section of the quarterly financial statement SLFO will approve standing orders for debt service payments Governmental Leasing Act Pages 77 - 81

71. Section 158 of the KY Constitution limits a county’s debt capacity to 2% of the value of taxable property within the county (Calculation available upon request) Capacity is determined from the most recent assessment of taxable property as certified by the Department of Revenue. County Debt Capacity

72. Debt Capacity Worksheet

73. We will now take a short break.

74. County Elected Officials Training Incentive Program KRS 64.5275 (6) (7) Scott Sharp Training Coordinator

75. County Elected Officials Training Incentive Program Participation is VOLUNTARY Funding is LOCAL

76. County Elected Officials Training Incentive Program ATTENTION!! Incentive payments ARE NOT EXEMPT from State or Federal withholding requirements!

77. How Much? The amount of 1 incentive unit ($100) adjust annually for changes in the Consumer Price Index (CPI). 2009 CPI: .1% 2009 Incentive Value: $882.06

78. Incentive Payment Process Eligible once per calendar year upon completion of 40 hour training unit County funded DLG will mail notice to the official, the County Judge Executive, the County Treasurer, and the State Auditors Office Payment can not be issued until the authorization letter has been received!!! Must be budgeted Is subject to fiscal court review Is subject to all withholdings

79. When will I receive my letter? Officials that earn and incentive in 2009 can expect their letter: 1st Incentive: ASAP usually early February. 2nd Incentive: First week of March 3rd Incentive: First week of June 4th Incentive: First Week of September 5th Incentive: First week of November Additional Incentives will be processed during the month of December

80. How To Participate Complete the County Elected Officials Training Participation Form and submit to DLG 2. Notify your county’s Judge Executive to ensure that funds are budgeted 3. Attend 40 hours of approved training each calendar year 4. Send documentation of attendance to DLG within 60 days of training

81. Training ID# and Card Complete and send in the New/Updated Elected Official Information Form DLG will add you to the training database and mail you a training identification number card Use your training ID# to access your training record via the internet

82. KACo Association Conferences Area Development Districts Budget Workshops Local Schools, Universities and Colleges

83. Know in advance your county’s policy: Must training be pre-approved by the fiscal court? Must travel costs be pre-approved by the fiscal court? How much is budgeted for training and travel costs? Has the county budgeted for incentive payments? County Policies Regarding Travel, Training and Reimbursement...

84. Your Training Record Is Subject to Open Records Requests!!! as well as all of your proof of completions. Is accessible at the DLG website www.dlg.ky.gov

85. County Elected Officials Training Incentive Program If you have questions please contact the Department for Local Government Scott Sharp, Training Coordinator 1-800-346-5606 502-573-2382 Fax: 502-573-3712

86. Jail Report A Financial Overview of County Jail Funds within the Commonwealth of Kentucky

87. Overview The following report looks into the jail fund accounts of the 118 counties across the Commonwealth of Kentucky and is compiled directly from the quarterly reports submitted to the Department for Local Government (DLG) according to statutory regulation over the five fiscal year period of July 1, 2003 through June 30, 2008.

88. Purpose of the Report This report is intended to offer a brief overview of the current financial status of jails in Kentucky and chart the relationship between revenues and expenses based on the financial information accumulated over this five year period. This report examines: The past and present status of county jails An overview and comparison of the total revenues, expenditures, transfers, and prior year carryover Look into total jail receipts and what makes them up (jail revenues, transfers and prior year carryover) Major Jail Fund Revenues, their percentage of the total amount, and how they have changed from Major Jail Fund Expenditures, their percentage of the total amount, and how they have changed

89.

91. New Jails New Jails that have come on-line in the last year: Crittenden Leslie Taylor Todd Jails currently being built or approved to be built: Kenton Jackson

92. Questions

93. Department for Local GovernmentOffice of Financial Management & Administrationwww.dlg.ky.govToll Free: 1-800-346-5606Phone: 502-573-2382Fax: 502-573-3712

94. We will now take a short break.