2009-2011 Continuation Budget NC Office of State Budget and Management State Budget Conference October 15, 2008 Office of State Budget and Management Elizabeth

2009-2011 Continuation Budget

NC Office of State Budget and ManagementState Budget Conference

October 15, 2008

Office of State Budget and ManagementElizabeth Grovenstein, Assistant State Budget Officer

Agenda

Introductions Authorizing Legislation 2009-11 Continuation Budget

Process 2009-11 Attachments and Examples Questions

Authorizing Legislation

Chapter 143C, Article 3 G.S. 143C-3-5. (a) The Governor

shall present budget recommendations at a mutually agreeable time fixed by joint resolution.

G.S. 143C-3-5.(d) The budget shall include all Governmental and Proprietary (State) Funds.


Chapter 143C, Article 3 G.S. 143C-3-5.(b)(1) Includes goals

for improving the State and performance information for each program; and distinguishes continuation, reductions, eliminations, expansions, and all capital improvements.


Chapter 143C, Article 3 G.S. 143C-3-5.(b)(2) Budget uses

NCAS chart of accounts (2-digit level) with actual expenditures/receipts, certified budget, authorized budget, continuation budget with proposed increases and decreases for each year of the biennium.


Chapter 143C, Article 3 G.S. 143C-3-5.(b)(2) Budget shall

include accurate projections of receipts, expenditures, and fund balance. Receipts shall be adjusted to actual level of collections, unless there is a more reasonable basis upon which to budget.

What is the Continuation Budget

The continuation budget is the part of the state budget necessary to continue the current level of services when adjusted for inflation, enrollment growth, mandated rate increases such as social security, annualization of programs, and operation of new facilities.

2009-11 Continuation Budget Process

Basis of budget is the 2008-09 BD307 certified after modifications by the 2008 Short Session of the General Assembly in HB2436.

Type 11, 12, and 14 budget revisions are then added to the budget. One-time changes to the budget must be coded “O” to ensure they are not brought into the budget.

Continuation budget = Worksheet I (generated by BPS) plus supporting attachments (Excel)


Any fund and account titles errors must be corrected.

2007-08 actual expenditures and revenues are as reported to NCAS. These must match the certified June 2007-08 BD701 report.

Actual position counts should be entered into BPS at purpose code and account levels.


Agencies should review budgeted requirements for possible realignment via a type 14 606.

Agencies should review budgeted receipts for over or under-realization. Type 11 or 12 606s should be submitted to make permanent receipt budget adjustments. Agencies must be able to justify when receipts are not budgeted to actual levels.


Changes allowed in Worksheet I:1. Adjustments for enrollment or

population currently served in education, prisons, and entitlement programs.

2. Receipt-supported activities3. Clothing, telephone service,

textbooks and education supplies


Changes allowed in Worksheet I (continued):

4. Personnel-related items – social security, retirement, health benefits, longevity

5. Annualization6. Operating reserves for new

facilities7. Removal of nonrecurring items



8. Replacement of existing equipment NOTE: replacement of office furniture/equipment and IT equipment are NOT allowable

9. Replacement of existing motor vehicles

10. Replacement of other vehicles



11. Statutorily established salary increases

12. Office leases13. Transfers to state management

agencies14. Allowable inflationary adjustments

2009-11 Attachments

5-1 Explanation of Increases and Decreases

5-2 Equipment Schedule 5-3 Motor Vehicle Schedule 5-4 Other Vehicle Schedule 5-5 Building Reserves 5-6 Lease Schedule 5-7 Inflationary Schedule (except

gasoline) 5-8 Inflationary Schedule for Gasoline

Attachment 5-1 Example EXPLANATION OF INCREASES AND DECREASES SCHEDULE Section 4

(For continuation requests only) Attachment 5-1

(Due 10/31/08)

Department ABC Division or Institution XYZ Budget Code 1XXXX

Fund 1XXX

ACCOUNT TITLE EXPLANATION Attachmt AMOUNT TITLE EXPLANATION AMOUNT Attachmt

Requirements

531810 Social Security

Increase to reflect social security on scheduled salaries at 7.65% (or 1.45%)

5-10 $95,648 Social Security

Increase to reflect social security on scheduled salaries at 7.65% (or 1.45%)

$95,648 5-10

531830 Medical InsuranceIncrease to reflect medical insurance at $4,157 5-10 $20,408 Medical Insurance

Increase to reflect medical insurance at $4,157 $20,408 5-10

531870 Optional RetirementIncrease to reflect optional retirement on scheduled salaries at 13.14% 5-10 $14,525

Optional Retirement

Increase to reflect optional retirement on scheduled salaries at 13.14% $14,525 5-10

532721 In-State LodgingSubsistence Inflationary Increases

5-7$6,890 In-State Lodging

Subsistence Inflationary Increases $6,890

5-7

534541 Motor Vehicles Motor Vehicle Replacement 5-3 $18,000 5-3

Total Requirements $155,471 $137,471

Receipts

434321 Sale of Surplus Property Proceeds from the trade-in of vehicle5-3

$5005-3

Total Receipts $500 $0

Appropriation $154,971 $137,471

Submit 2 copies on 8 1/2 x 11-inch paper.

2009-10 2010-11

2009-11 Attachments

Replacement of Existing Equipment – (Attachment 5-2, was Attachment 9 in 07-09) An equipment schedule will be required only

when the request is greater than the amount of the recurring authorized budget.

Equipment requests must have sufficient justification.

Justification should include the specific reasons why the equipment is essential and why the existing equipment is no longer usable.

PRIORITIZE!

Attachment 5-2 ExampleSection 5

Attachment 5-2

(Due 10/31/08)


EQUIPMENT QUANTITY COST TOTAL QUANTITY COST TOTAL

FUND ACCOUNT* PRIORITY DESCRIPTION JUSTIFICATION NUMBER PER UNIT COST NUMBER PER UNIT COST

1XXX 534523 1

Replace Refrigerant Recovery Unit 003 (VanSteenburgh)

Unit was purchased in 1992 and has been condemned. This is a critical item to meet EPA requirements.

1 $5,000 $5,000

1XXX 534524 2

Thunderbold XL 225 AC Arch Welder

Replaces 30 year old arc welder that has many safety issues. Wireing input on the welder does not meet and electracal code and insullation on the welding feed has began to deteriorate. The machine will not maintain a set amperage while welding. 1 $400 $400

Total by Fund/Account $5,400 Total by Fund/Account $0

$0 $0

*Prepare a separate schedule for each Fund/Account. $5,400 $0

(R) = Replacement (I) = Installment

EQUIPMENT PURCHASE SCHEDULE

PURCHASE OR INSTALLMENT PAYMENTS

(For continuation requests only)

Net Amount to Worksheet I (Columns 6 & 8)

Net Amount to Worksheet I (Columns 6 & 8)

2009-10 2010-11

Less: 2008-09 authorized equipment budget

Less: 2008-09 authorized equipment budget

2009-11 Attachments

Licensed Motor Vehicles – (Attachment 5-3, was Attachment 10 in 07-09) > 110,000 miles < 110,000 miles must have sufficient written

justification EXCEPT law enforcement. >70,000 miles Highway Patrol and DMV,

80,000 miles all other law enforcement Justification needs to include priority, safety

issues, whether or not the vehicle is operational, and the specific nature causing the replacement request.

Attachment 5-3 ExampleLICENSED MOTOR VEHICLE PURCHASE SCHEDULE Section 5

(For continuation requests only) Attachment5- 3

(Due 10/31/08)


DATE 2009-10 2010-11

DESCRIPTION PURCHASED ESTIMATED TRADE-IN TRADE-IN

(MAKE, MODEL, (MONTH MILEAGE AS TYPE JUSTIFICATION TOTAL VALUE** TOTAL VALUE**

FUND ACCOUNT PRIORITY YEAR AND VIN) AND YEAR) OF 6-30-09 OF USE* (IF APPLICABLE) COST (IF APPLIC.) COST (IF APPLIC.)

1XXX 534541 1 FORD AEROSTAR 1988 May-89 46,314 OTH bad rusted body frame around $14,276 $200

1FTCA14U8JZB12135 base of truck and inside wheel

compartment-needs complete

body work-rust has eaten

holes throughout body1XXX 534541 2 1989 Chev Cheyenne

1GBGC24K3KE212060Apr-89 87,000 OTH transmission slips

doors will not lock - bed door won't close securelynumerous fluid leaks - uses lot of oilspeed/odometer broken - actual mileage much higherside door falls off when openedmirrors rusted out - driver side window crank broken

$22,500 $500

Total Request by Fund/Account $14,276 $200 $22,500 $500

Less: FY 2008-09 Authorized Licensed Motor Vehicle Budget (Column 5) $0 $0 $0 $0

Net Amount to Add (Subtract) to Worksheet I (Columns 6 & 8) $14,276 $200 $22,500 $500

(Requirements to Motor Vehicle Account (Object) and Trade-in to Sale of Surplus Property Receipt Account (Object)

*Type of use will either be State Highway Patrol (SHP), Division of Motor Vehicles (DMV), other Law Enforcement (OLE) or other (OTH).**Trade-in value will be shown as estimated receipts - "Sale of Surplus Property."

2009-11 Attachments

Other Motor Vehicles – (Attachment 5-4, was Attachment 11 in 07-09) A request should be made only when it

exceeds the recurring authorized budget. Only replaced on an irregular basis like

tractors, front-end loaders, lawn mowers, back-hoes, etc.

Only with sufficient justification emphasizing priority, necessity to agency mission, use, and safety.

Attachment 5-4 ExampleOTHER VEHICLE PURCHASE SCHEDULE Section 5

(For continuation requests only) Attachment 5-4

(Due 10/31/08)


DATE 2009-10 2010-11

DESCRIPTION PURCHASED TRADE-IN TRADE-IN

(MAKE, TYPE (MONTH NUMBER JUSTIFICATION/CONDITION* TOTAL VALUE** TOTAL VALUE**

FUND ACCOUNT PRIORITY YEAR AND MODEL AND YEAR) REQUESTED COST (IF APPLIC.) COST (IF APPLIC.)

1XXX 534549 1Kawasaki Mule KAF620-E1 CAMS#857402 May-01 1

Will not crank often times; constantly needs repairs and parts/service are no longer avail to us in this area; dangerous to drive when loaded due to aging mechanical parts; repair costs exceed value of equipment; not dependable $12,500

1XXX 534549 2 Trailer (hay) CAMS#850116 Mar-89 1

17 year old trailer not dependable for hauling weight of hay; constant breakdowns due to mechanical and stress $4,000

1XXX 534549 3 Melex golf cart Jun-90 2Parts are obsolete; one is non functional as of 01/08 $13,000 $13,000

Total Request by Fund/Account $29,500 $0 $13,000 $0

Less: FY 2008-09 Authorized Licensed Motor Vehicle Budget (Column 5) $0 $0 $0 $0

Net Amount to Add (Subtract) to Worksheet I (Columns 6 & 8) $29,500 $0 $13,000 $0

(Requirements to Motor Vehicle Account (Object) and Trade-in to Sale of Surplus Property Receipt Account (Object)

*Provide information from maintenance records, frequency of repairs, and other pertinent information such as mileage or hours of operation to assist in determining condition.**Trade-in value will be shown as estimated receipts - "Sale of Surplus Property."

2009-11 Attachments

Building Reserve – (Attachment 5-5, was Attachment 12 in 07-09)

Operating costs to make facilities operational and functional are allowed in the continuation budget for authorized capital projects scheduled for completion during the 2009-11 biennium

A detailed account breakdown of each reserve must be submitted separately, with the estimated completion date of the facility provided by the Office of State Construction, number of positions required, proposed classification of each position, and other operating costs.

Attachment 5-5 ExampleThe University of North Carolina2009-2011 Operating Reserves MASTER Continuation Budget CP 07-18-08 Attachment 5-5

0180 General Institutional Support

Budget Code #####0180 - 71XXReserve for Maintenance and Operating of

Generic Building ##### GSFC.I. Code: Item:Date Const. Authorized Construction CostEst. Substantial Completion Date Fund Release DateBuilding Type 1 Adm/Acad/ClassroomNumber of Months Budgeted 12 12Number of Smart Classrooms Annual Annual

Budget BudgetSUBHEAD DESCRIPTION 2009-10 2010-11

0180 - 1210SPA Reg. Salaries StaffFactor (FTE per) Staff Rounded Rate

Building Environmental Service Technician (BEST) 18,000 GSF 5.56 5.6 22,380 $125,328 $125,328Building Environmental Service Supervisor (BESS) 12Hskpr. 0.46 0.5 30,239 15,120 15,120Facilities Maintenance Technician Mechanical (FMTM) 25,000 GSF 4.00 4.0 40,000 160,000 160,000Public Safety Officer 100,000 GSF 1.00 1.0 35,263 35,263 35,263EHS Technician 300,000 GSF 0.33 0.3 47,401 14,220 14,220IT Neworking Technician (Infrastructure) 250,000 GSF 0.40 0.4 46,100 18,440 18,440IT Networking Technician (Classroom Support) 15 CLS 0.00 0.0 46,100 0 0Facilities Maintenance Technician Trades (FMTT) 57,000 GSF 1.75 1.8 27,120 48,816 48,816________ ________

Subtotal 13.51 13.6 417,187 417,1870180 - 1232Shift Differential 10.00 % 16,059 16,0590180 - 1810Social Security 7.65 % 31,915 31,9150180 - 1820State Retirement 8.140 % PSO add 5.00 % 35,722 35,7220180 - 1830Medical Insurance 4,157 ea. 56,535 56,5350180 - 2100Hskpng. Supplies

Initial Supplies 1 Mth. 1,158 0Regular Supplies 0.139$/GSF 13,899 13,899________ ________Subtotal 15,057 13,899

0180 - 2400Repair SuppliesInitial Repair Supplies 1 Mth. 6,003 0Regular Supplies 0.720$/GSF 72,042 72,042

0180 - 2900Other SuppliesInitial Police Supplies 4,616 $/Officer 4,616 0Police Supplies 728 $/Officer 728 728IT Supplies (Infrastructure) 0.112$/GSF 11,247 11,247IT Supplies (Clsrm. Support) 2,251 $/ Classroom 0 0________ ________Subtotal 94,636 84,016

Fctr.0180 - 3300Utilities 1.00 0.51$/GSF 51,000 51,0000180 - 3200 Communications 0.122$/GSF 12,202 12,202

0180 - 3900 Other Current Services Moving Costs 10,000 Est. 10,000 0

0180 - 4400 Maint. ContractsElev. Maint. (# of Elev.) 2 700Est. @. 1,400 1,400Pest Control 450 Est. 450 450Refuse Removal 1,200 Est. 1,200 1,200Uniforms (# of New Employees) 11.9 100 Est.@ 1,190 1,190Security 1,200 Est. 1,200 1,200Controls/Chillers 1,200 Est. 1,200 1,200________ ________Subtotal 6,640 6,640

0180 - 4500 InsuranceReal Property Est. 0 0Vehicle 1 301Est. @ 301 301________ ________Subtotal 301 301

0180 - 5400Vehicles 1 15,125Est. @ 15,125 00180 - 5500Other Equipment 92,784 $/FTE/GSF/Bld (see page 2) 92,784 00180 - 5500Other Equipment 0 Att. List or Basis Page 2 0 0

TOTAL – RESERVE FOR OPERATION OFGeneric Building $855,164 $725,476

Institution:

2009-11 Attachments

Building Lease – (Attachment 5-6, was Attachment 13 in 07-09)

A building/office lease schedule is required only when the request is greater than the amount of the authorized budget.

Attachment 5-6 Example

LEASE SCHEDULE Section 5

Building/Office Leases Schedule Attachment 5-6

(For continuation requests only) (Due 10/31/08)


Net Cost Per Annual Term of Effective 2009-10 2010-11

FUND ACCT. LESSOR LOCATION Sq. Ft. Sq. Ft. Rent Lease Annual Rent* Amount Amount

1XXX 532512 Carolina Financial Management Inc171 ComTech Driv, Pembroke NC 1700 $15.44 $26,250 Four years - effective July 1, 2008 $37,800 $37,800 $39,690

1XXX 532512 WillLow T. Enterprises 49 Desse Rd. Pembroke, NC 2600 $3.23 $8,400 Two year - effective July 1, 2008 $12,180 $12,180 $12,369

1XXX 532512 GE Equipment Services 815 Purser Dr, Raleigh, NC 3000 $10.15 $30,450 Three year - effective July 1, 2008 $35,700 $35,700 $37,485

1XXX 532512 Mint Museum of Craft & Design 200 N. Tyron St. Charlotte, NC 13,133 $15.30 $200,935Four years - effective July 1, 2007 with

one 5-yr renewal option $201,000 $201,000 $201,000

Total Lease Cost $286,680 $290,544Authorized Budget for Building/Office Lease Requirements $281,435 $281,435Authorized Budget for Receipts $0 $0Increase (Decrease) Amount $5,245 $9,109

* - Effective Annual Rent might include costs negotiated in the lease such as utilities, housekeeping, etc. if charged in addition to the cost per square foot.

Prepare a separate schedule for each Fund.

2009-11 Attachments

Allowable Inflationary Factors Water and Sewer, Electricity, Natural Gas,

Subsistence, and Library Books (2007-08 Actual Expenditures X Inflationary

Rate) minus (2008-09 Authorized Budget) = allowable change

Example: The 2007-08 Actual Expenditures are $500,000, the 2008-09 Authorized Budget is $520,000, and the water/sewer rate is 1.087 for 2009-10 and 1.125 for 2010-11

2009-10: $500,000 x 1.087 = $543,500 - $520,000=$23,500


INFLATIONARY INCREASE FOR ALLOWABLE ITEMS

(For continuation requests only) Section 5

Attachment 5-7(Due 10/31/08)


2007-2008 2008-2009 2009-2010 2009-2010 2009-2010 2010-2011 2010-2011 2010-2011

ACTUAL AUTHORIZED INFLATION CALCULATED INCREASE INFLATION CALCULATED INCREASE

FUND* ACCOUNT EXPENDITURE BUDGET FACTOR TOTAL (DECREASE) FACTOR TOTAL (DECREASE)

1XXX 532230 $1,154,880 $1,056,315 1.087 $1,255,355 $199,040 1.125 $1,299,240 $242,925

1XXX 532210 $4,525,150 $4,138,946 1.070 $4,841,911 $702,965 1.070 $4,841,911 $702,965

1XXX 532220 $3,334,844 $3,435,988 1.253 $4,178,560 $742,572 1.251 $4,171,890 $735,902

1XXX 532721 $83,825 $70,600 1.077 $90,280 $19,680 1.098 $92,040 $21,440

TOTAL $9,098,699 $8,701,849 $10,366,104 $1,664,255 $10,405,080 $1,703,231

*Prepare a separate schedule for each Fund.

Items Account Number Items Account Number

Food 533410xxx Gasoline, Regular Grade 533310Drugs 533610xxx Deisel #2 Fuel Oil 533320Medical Supplies 533630-90xxx Residual Fuel Oil 532241Water and Sewer 532230 Text Books 534620 or 5365xxElectricity 532210 Ed. Supplies, Materials, Equip 533720Natural Gas/Propane 532220 Library Books and PeriodicalsSubsistence 53272x

Allowable Inflationary Items

2009-11 Attachments

Allowable Inflationary Factors Gasoline (Rate per Gallon)

(2007-08 Actual Gallons X Inflationary Rate Per Gallon) minus Authorized Budget = allowable change

Example: Actual Gallons = 100,000 Inflationary

Rate/Gallon = 2.976Authorized Budget =

$100,000 (100,000 X 2.976) - $100,000) = $197,600


INFLATIONARY INCREASE FOR GASOLINE AND FUEL OIL Section 5

(For continuation requests only) Attachment 5-8(Due 10/31/08)


2007-2008 2008-2009 2009-2010 2009-2010 2009-2010 2010-2011 2010-2011 2010-2011

ACTUAL AUTHORIZED ESTIMATED CALCULATED INCREASE ESTIMATED CALCULATED INCREASE

FUND* ACCOUNT GALLONS BUDGET $ PER GALLON TOTAL (DECREASE) $ PER GALLON TOTAL (DECREASE)

1XXX 533310 56,060 $36,824 2.98 $166,835 $130,011 3.25 $181,915 $145,091

*Prepare a separate schedule for each Fund.

2009-11 Budget Instructions Fringe Benefits

Social Security: 7.65% < $102,000 Use 7.65% for all salaries < $102,000 Use 1.45% for all salaries > $102,000

Retirement: Teachers & State Employees: 8.14% State Law Enforcement Officers: 13.14% University Employees Optional Retirement: 11.46%

Health Benefits: $4,157 per year or $3,165 if Medicare-eligible

Continuation Budget Submission 10-31-08 2 hard copies and all attachments electronically

2009-11 Budget Instructions Useful Websites

For WSI budget attachments and system manuals

http://www.osbm.state.nc.us To download X/TND or see X/TND

documentation: http://sccb.its.state.nc.us/sysware/sysware.h

tm NC Budget Systems (BRS/BPS/Allotments)

http://www.osbm.state.nc.us/budget_systems.html

Questions

2009-11 Results-Based Budgeting (RBB) Requirements

Most RBB elements should already be complete Agency overviews, missions, goals, strategies, key

indicators, fund purposes, services, and measures were due June 27, 2008

Submissions that are still incomplete or require changes need to be finalized as soon as possible

Remaining requirements are due October 17 Service analysis data Key agency indicator data Fund-level performance measure data


Key agency indicator and fund-level performance measure data Enter data for three fiscal years (2005-06,

2006-07, 2007-08) For previously reported measures, verify that

historical data are complete and accurate and provide data for 2006-07 and 2007-08.

For newly reported measures, provide all available historical data.

If data are not available for all three years, data must be entered for the most recent year (2007-08) in order for the indicator/measure to be printed.


Service Analysis Enter 2007-08 actual requirements and FTEs

for each service statement. Actual requirements should be allocated using

the methodology agreed upon with your OSBM analyst.

FTE identified for each service should include staff supporting the service function, as well as positions that are vacant or were vacant for part of the year.

Why is RBB important? Communicates your budget in terms of

the services and programs you provide. Provides the foundation for the expansion

budget process. Priority consideration will be given to expansion requests that:

Clearly support agencies’ goals, and Demonstrate a positive impact on key agency

indicators and performance measures

Promotes greater transparency and accountability

Documents

2009-2011 Continuation Budget NC Office of State Budget and Management State Budget Conference October 15, 2008 Office of State Budget and Management Elizabeth