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FY2009 Reserve Strategy

FY2009 Reserve Strategy. May 13, 2008. Overview. Purpose of Reserves Reserve Strategy FY2009 Reserves Capital Technology Fleet. Why Have a Reserve?.

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FY2009 Reserve Strategy

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  1. FY2009 Reserve Strategy May 13, 2008

  2. Overview • Purpose of Reserves • Reserve Strategy • FY2009 Reserves • Capital • Technology • Fleet

  3. Why Have a Reserve? • Board adopted a pay-as-you-go strategy to have a dedicated, sustainable, steady, andpredictable funding source for ongoing investments in managing our business • Disciplined financial management • Reserves • Capital • Technology • Fleet

  4. Effective & Efficient Government Effective & Efficient Government • Affordable & Competitive Tax Rate • Employee Motivation & Satisfaction • Reduce/Avoid Costs • Employee Access to Information • Employee Knowledge, Skills, and Abilities • Financial Management • Technology-Related Capacities • Triple-A Bond Rating Reserves Link to 3 Yr Emphasis Requires Immediate Action Monitor Performance Maintain Performance

  5. Reserve Strategy • Current strategy is to fund all reserves equivalent to 2¢ on the tax rate

  6. Reserve History

  7. Reserves • Capital • Technology • Fleet

  8. Capital Reserve • Funds for the replacement, renovation, and repair of the County’s capital assetsso that employees, visitors, and customers have a safe, clean, comfortable environment in which to work and conduct business • Goal – Provide comprehensive stewardship of county facilities so that they can be maintained in a timely and cost efficient manner

  9. Capital Asset Portfolio • 44 Buildings 2 Parking Decks • 2,400,000 square feet • Current Replacement Value (CRV) ~ $720,000,000 • Managed by Real Estate Services Department, Buildings and Grounds Division

  10. Funding Maintenance • National Research Council recommends 2-4% of the current replacement value as Capital Reserve funding level • Mecklenburg County FY2007 levels were .7%*and FY2008 levels were .6%* *Based on Facilities Maintained by the Real Estate Services Dept., Buildings and Grounds Division

  11. Status of Capital Reserve • FY08 Budget – $8.2 M • Total identified need FY09 – $13.7 M • Projects prioritized based on two criteria (Risk & Need)

  12. Capital Reserve Request* *See capital project list handout

  13. FY09 Work to be Done - Critical Samuel Billings The roof has exceeded its useful life and has required numerous patches. The leaks have resulted in water damage in the facility.

  14. FY09 Work to be Done - Critical McDowell Parking Deck The deck needs to be cleaned, sealed and painted. Failing paint needs to be replaced before serious structural damage occurs.

  15. FY09 Work to be Done - Critical Carlton Watkins Center The doors and door frames have exceeded their useful life. The failures shown here allow water to enter the facility.

  16. FY09 Work to be Done - High Fleet Facility HVAC Replacement The units have exceeded their useful life and do not run efficiently.

  17. Technology Reserve • Funds for the acquisition and replacement of technologies which enhance the County’s ability to manage its information assets and serve the customers. • Goal – Invest in technologies which has a tangible return on investment

  18. Infrastructure Needs Enterprise Imaging PC Replacements Printer Replacements Teleworking VoIP (Library) Business Support eCura Replacement (AMH) Just One Call PSO Software (AMH) Financial System Upgrade DA File Tracking System Mobile Data Units (DSS) FY09 IT Investments

  19. Technology Reserve Status *See technology project list handout

  20. Fleet Reserve • Goal – Maintain a reliable fleet of vehicles that allow County employees to do their jobs effectively and efficiently • Strategy – Maintain the average age of the fleet at 3-4 years. • Average age of fleet = 4.8 years (down from 5.2) • Planning one purchase of 200 vehicles in FY09, bringing the average age of the fleet to 3.5 - 4 years

  21. Fleet Purchase Composition

  22. Year Purchased

  23. Fleet Reserve Status • FY06 Investment - $4.15 M (.50 cents) • FY07 Investment - $2.25 M (.25 cents) • FY08 Investment - $2.30 M (.25 cents) • FY09 Investment - $2.40 M (.25 cents) • 320 Vehicles purchased to date

  24. Summary • The needs of the County continue to grow as we add facilities and vehicles and technology improves • Funding of the capital, technology, and fleet reserves are important to sustain the County’s operations • Challenge for FY2009 will be balancing the business needs/strategies against the financial realities that the County is facing.

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