Commissioners get peek at debt transparency project, unpack budget process

The Buncombe County Board of Commissioners convened to talk about debt transparency and discuss the recent budget process. Last month, commissioners approved a $431 million budget that includes a 2-cent property tax rate hike. No official action was taken during the three-hour workshop on July 11.

Dashboard light

In an effort to give commissioners and the public access to real-time financial data, county staff will roll out a debt dashboard with an eye toward making the process easier to use. “How do we bring this information to the public in a more understandable way? How do we explain the whole debt process?” county Finance Director Tim Flora rhetorically asked.

Commissioners are guided by three policies when taking on debt: Debt cannot exceed 3 percent of the county’s assessed value; debt payments cannot exceed 18 percent of total expenditures (Buncombe is currently at 9.3 percent); and at least 55 percent of overall debt must be paid off in 10 years (Buncombe is currently at 66 percent for that benchmark). The new debt dashboard aims to track where the county stands in regard to those metrics in a way that is relatable and accessible.

The county currently has $406.8 million in debt, with nearly $84 million of unissued obligations, or future debt, on deck for the next two fiscal years. The yet-to-be-issued debt will mostly be for school capital projects and is mostly paid for by dedicated sales tax revenues. Other counties of comparable size to Buncombe have the following debt per capita (or how much each resident would have to pay to clear the red ink), according to county staff:

• Wake County, $2,527.
• Mecklenburg County, $2,073.
• Buncombe County: $1,650.
• Durham County, $1,627.
• Guilford County $1,621.

“If we are focused on paying down debt over the next few years, how much money does that free up? This is a place where we are taking some pressure off,” said Commission Chair Brownie Newman, who is looking to keep the current property tax rate of 53.9 cents per $100 of assessed value locked in for at least two years.

Flora noted the county is in a good position in that there are no major infrastructure projects on the horizon. “We shouldn’t have any major needs. Moving forward, it should be major maintenance,” he said.

Commissioner Al Whitesides admired the potential for residents to be able to check on county finances but cautioned about not sacrificing accessibility for more robust features. Flora responded, “We will balance giving the public information they need and make it accessible, but also have details you can drill down to if you want.”

Mandy Stone, the newly appointed county manager, said, “We want to get to the point where the public and media have total access; they see exactly what we see.”

County staff members said they hope to make the debt dashboard available to the public in the next few months.

Unpacking the process

Last month, commissioners approved a budget for the current fiscal year but have already turned attention toward next fiscal year. In an attempt to alter next year’s process, commissioners told staff about changes they would like for future budgets.

“I’ve been through five [budgets] and I’ve had surprises at the end of every one. I want to know exactly what we are doing when I walk in … that’s the most important thing to me,” said Commissioner Mike Fryar.

Freshman Commissioner Robert Pressley noted his first budget spawned some confusion about community grant funding of nonprofits. “They are asking for $300,000, and then I’m hearing they are satisfied with $75,000. Give us the number you want or need,” he said.

Whitesides piggybacked on Pressley’s frustration about the nonprofit funding process, stating it takes up a disproportionate part of the overall process. “When you do a budget, you spend the most time on the most important part of the budget. I’m not saying nonprofits aren’t important, but we spend a lot of time on what’s a small part of the budget,” he said, noting the process could be more efficient and is “too bulky.”

Whitesides also argued that crafting a spending plan shouldn’t be rushed. “It’s almost like we waited until the last moment to do the budget. This should be built over the year.”

Newman acknowledged that while he asked for the process to begin earlier, it still needs more time, stating that it should begin in April.

Stone assured commissioners that “earlier in the calendar year is not a challenge.” Also, she said, “The budget presented was not department-based. So you might see a health and human services program in public safety.”

Newman noted that he wants to look at the county’s fund balance, which functions as the county’s savings account. Commissioners dipped into it at the last minute to help pay for local teacher supplements. North Carolina mandates counties carry an 8 percent fund balance, while Buncombe County policy requires that its fund balance remain at 15 percent.

Newman thinks that percentage could be lowered to reduce pressure elsewhere. “My two-cents is that we need to stay above [the state mandate], but our current number is arbitrarily high,” he said. “It feels like we are padding it a bit. You need to be conservative … but I’d like for our budgets to be tight with some reasonable contingency and not always forecast a big fund balance.”

Stone added that new technology allows staff to have a more accurate sense of cash flow, potentially reducing the need for a higher fund balance.

County staff is set to present commissioners with a proposed timeline for next fiscal year’s planning process during a workshop on Tuesday, July 25.