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Changing the Way Henrico Does Business. VML Conference October 3, 2011. County of Henrico, Virginia. Summary. Henrico County – An Introduction Henrico County’s Financial Management Economic Downturn – Impact on the County’s Budget Changing the Way Henrico Does Business - PowerPoint PPT Presentation
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Changing the Way Henrico Does Business
VML ConferenceOctober 3, 2011
County of Henrico, Virginia
SummaryHenrico County – An IntroductionHenrico County’s Financial ManagementEconomic Downturn – Impact on the County’s
BudgetChanging the Way Henrico Does BusinessHenrico Advantage CardLooking Ahead – Future Challenges and a
Long Road to RecoverySummary
Henrico County – An Introduction
Henrico County, Virginia
Area: 244.06 square miles Population:306,935 Registered Voters: 195,108 in 2010. Median Household Income: $58,194 (2007). Approximately 25,000 businesses employ 155,209 people
in Henrico County. 4 Fortune 1000 companies headquartered here.
HENRICO
Henrico County Government Profile
Henrico’s Board of Supervisors and County Manager have governed together since 1996.
The policies and budgetary restrictions set by the Board and the County Manager have kept Henrico’s government as one of the leanest of the lean while still delivering exemplary service.
Board of Supervisors
R. Glover, Vice-Chairman
P. O'Bannon,Supervisor
D. Kaechele, Supervisor
J. Donati, Jr., Supervisor
F. ThorntonChairman
V. Hazelett, P. E.
County Manager
Education54%Public
Safety21%
Rec & Cult.4%
Miscel-laneous
2%
Gen. Govt. Adm.7%
Judicial Adm.1%
Community Devel-opment
3%Public Works
5%Health Soc.
Services3%
Henrico’s Expenditure Priorities
$743,661,366
FY2011-12 General Fund Expenditures
Henrico County Public Schools Newsweek recognized
Deep Run, Freeman, Godwin and Henrico High Schools as four of “America’s Best High Schools” in 2010.
Ten schools earned the 2011 Governor’s Award for Educational Excellence and 21 schools earned the 2011 Board of Education’s VIP Awards.
Student-Laptop Program
Just the FactsTotal Students 48,431Total Teachers 3,687Total Schools 71Scholarships $15.8 MillionGF Operating Budget (FY12) $403.8 MillionPer Pupil Expenditure $9,061
Henrico County’s Financial Management
Henrico County’s Fiscal Guidelines
When the recession started – Henrico County better prepared than most.
Conservative revenue projections and limited expense growth.
Adherence to the 5.0% Increment
2002
2002
Ops20
03
2003
Ops20
04
2004
Ops20
05
2005
Ops20
06
2006
Ops20
07
2007
Ops20
08
2008
Ops20
09
2009
Ops.2010
2010
Ops.2011
2011
Ops.-1.0%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%
4.7% 5.0%
4.2%
5.0% 5.0%
6.0%
5.0% 5.0%
-0.7%-3.4%
Consumer Price Index Population Expenditure Growth
5.0 percent guideline for continuing operations
-3.4%
Healthy Undesignated Fund Balance
The County does not use its undesignated fund balance to subsidize current operations.
A healthy undesignated fund balance has given the County an additional financial buffer against economic shocks to the budget.
% of Fund Balance
FY98 8.95%FY99 10.67 %FY00 12.90 %FY01 15.54 %FY02 16.69 %FY03 17.79 %FY04 18.04 %FY05 18.00 %FY06 18.00 %FY07 18.00 %FY08 18.00 %FY09 18.00 %FY10 18.00 %FY11 18.00 %
Keeping Costs Down
By Locality0
5
10
15
20
25
1816.4
15.4
11.8 11.7 11.7 11.7
20.6 20.7
25.6
17.716
AlexandriaArlingtonChesapeakeChesterfield Fairfax Hanover Henrico Newport NewsNorfolkRichmondRoanokeVirginia Beach
Num
ber o
f Pos
ition
s per
1,0
00 C
itize
ns
Citizen/Position Ratios for Selected Localities
FY2011 Residential Monthly Tax Burden
Series1
$0.00 $100.00 $200.00 $300.00 $400.00 $305.29
$282.25 $219.72
$178.88 $316.89
$221.15 $162.58
$364.97 $230.76 $239.34
$363.81 $226.47
$279.70 $343.43
$200.98 Virginia BeachStaffordSpotsylvaniaRichmondPrince WilliamNorfolkNewport NewsLoudounHenricoHamptonFairfaxChesterfieldChesapeakeArlingtonAlexandria
Note: Does not include Stormwater Management Fees or Refuse Collection Fees.
Triple AAA Bond Ratings One of 34 counties in the nation to hold this
credit rating. First locality to have its triple AAA bond rating
reaffirmed after the Federal Government’s Bond Rating downgrade.
Debt Ratio GuidelinesDebt as a Percentage of General Fund Expenditures 7.75%Debt as a Percentage of Assessed Value 1.49%Debt per capita $1,650
Henrico County – Revenue Reductions
Revenue Reductions
Real Estate Tax Revenues
33%
State Revenues34%
All Other Local Revenues
31%
Federal Revenues
2%
Local government revenues hit on every front by the economic downturn.
Between FY2009 and FY2011, Henrico lost more than ten percent of its General Fund revenues.
FY2011-2012 General Fund Revenues
Source: Standard & Poor’s
Housing MarketNationally – Home prices have fallen 33% from their
peak in 2006; surpassing the 31% decline experienced during the Great Depression.
Apr-04 Sep-05 Feb-07 Jul-08 Dec-09 Jun-11-30%
-20%
-10%
0%
10%
20%
S&P Case-Shiller 20 Home Price Index(Year-over-Year Percent Change)
20%10%
0%-10%-20%-30%
Apr-04 Sep-05 Feb-07 Jul-08 Dec-09 Jun-11
S&P Case-Shiller 20 Home Price Index(Year-over-Year Percent Change
FY2008-09 Actuals
FY2010-11 Budget Difference
Local $567,223,106 $528,774,300 ($38,448,806)
State 327,278,263 275,337,000 ($51,941,263)
Federal 11,922,329 10,860,200 ($1,062,129)
Total $906,423,698 $814,971,500 ($91,452,198)
Revenue Reductions
Changing the Way Henrico Does Business
Henrico County’s Fiscal Priorities
Henrico established three primary goals in response to the downturn which it has maintained throughout:No Reduction in Service Levels
No Tax Rate IncreaseNo Layoffs
Changing the Way We Do Business
Each Department in the County evaluated their FY2011-12 budgets – cutting costs and improving efficiency where ever possible.
As a result of these efforts the County was able to achieve considerable savings. $56,500,861 in Total Savings
One-time Savings - $5,465,532 Annual Savings - $33,305,329 Debt Service Savings - $17,730,000
Efforts in savings and efficiency are ongoing.
Hiring Freeze & Personnel Savings
Henrico County achieved $21.6 million total Personnel Savings. 278 vacant positions were either eliminated
or placed in the hold complement throughout FY2009-2010 and FY2010-2011. 122 positions from General Government
156 positions from Schools.
Volunteers Use of Volunteers & Interns
◦In FY2009-10, 1,144 volunteers were utilized per month which equated to approximately 106 full-time employees. This initiative conservatively saved the County $4,600,000 in FY2009-10.
Energy Reduction580 trillion BTU’s in energy consumption have
been saved since FY2003-04, leading to $13.5 million in savings. Utilized methane landfill gas to generate revenue
from an electric power vendor – $150,000. Central Automotive Maintenance utilizes used motor oil to heat their facility - $16,200.
Replaced most of the traffic signals incandescent bulbs with LED - $100,000. (LED in traffic signals replaced less often.)
County-wide Printing Reduction in size of newspaper ads - $37,900.Altered the day of the week Planning’s legal notices
are published in the newspaper – $11,600. Creation of an E newsletter for Libraries reduced
printing budget - $65,000.Reduced the number of toner cartridges in contract
for student printers - $450,000.Reduction in number of school publications -
$23,302.
Contracts and LeasesShifted prescribing responsibilities to
nurse practitioners and psychiatric-level staff in MHDS where appropriate - $200,000 in savings.
Renegotiated four current facility leases – $99,400 in savings.
Extended four year laptop lease in elementary schools to six years – $1,000,000 in savings.
Maintenance and Repairs
Reducing frequency of routine maintenance of grounds keeping, painting, carpet replacement, etc. in schools – $530,000 in savings.
Use of inmate labor for painting. Opening of a fire extinguisher repair
shop.
Henrico Advantage Card
Looking Ahead Future Challenges and a Long Road to Recovery
Future Budgetary ChallengesHow will the State’s budgetary imbalances
impact the localities? Federal Health Care Reform Act –
increased costs in future localities’ budgets.
Has the real estate market reached bottom – when will improvement be seen?
Stubbornly high unemployment – deteriorating impact on federal, state, and local budgets.
Future Budgetary ChallengesGovernor McDonnell keeps alluding to
possible reforms to Virginia Retirement System.How will VRS “reform” impact localities?
The state has continually underfunded its actuarial liability - $18 billion in underfunded liabilities.
Possibility of a reduction in benefits or changes in localities/employees’ contributions.
Long Road to Recovery
Jan. 1981Jan. 1986Jan. 1991Jan. 1996Jan. 2001Jan. 2006Jan. 20110.0%2.0%4.0%6.0%8.0%
10.0%12.0%
National State Henrico
15 year period before unemployment fell below
5% level
Unemployment Rates Since 1981
The Fear of Recession Looms
Aug-09 Jan-10 May-10 Oct-10 Feb-11 Jul-1105
10152025Google Searches for “Double Dip Recession”
Tim
es G
reat
er th
an th
e Av
erag
e
Similar to 3Q 2010, fears of a double dip have emerged.
Note: Scale based on the average number of searches between January 2004 to present. Source: www.Google.com
SummaryHistorically, the County has adhered to prudent
fiscal policies.Economic downturn reduced County revenues
drastically.Revenue reductions absorbed internally. No
increase in taxes. In order to Change the Way Henrico Does Business,
an examination of day-to-day operations was performed by all departments.
Significant savings have been achieved due to the County’s efforts.
It will be a long road to recovery.
Video PresentationClick below to watch a two part video.
1. Changing The Way We Do Business2. Henrico Advantage Card
Changing the Way Henrico Does Business
VML ConferenceOctober 3, 2011
County of Henrico, Virginia
