FISCAL RESPONSIBILITIES OF COUNTIES

1. FISCAL RESPONSIBILITIES OF COUNTIES INITIATION & CONTINUING EDUCATION NOVEMBER 2012 Patty Weeks

2. Areas that we will cover • Who’s budget is it? • Who is responsible for the budget? • Role of the County Auditor • Role of the County Commissioners (BOC) • Role of other elected officials • Budget cycle • Budget content • Budget processing • Financial reporting • Fraud • Misc.

3. WHO’S BUDGET IS IT? • The budget is basically a document that sets county policy. • Every elected official has a role in this document.

4. Commissioners Auditor Assessor Coroner Prosecuting Attorney Sheriff Treasurer BOCC Planning & Zoning Road & Bridge Noxious Weed Computer Services Probation County Agent Emergency Mgmt. Custodial Enterprise Funds Who is responsible for the budget?

5. Role of County Auditor • Under Idaho Code Section 31-1602, County Auditor shall be the budget officer. • Responsible for compiling revenue projections and expenditures. • Prepare and submit a proposed budget to BOCC. I.C. 31-1603. • Prepare proposed budget and publish in newspaper. I.C. 31-1603

6. Role of the Board of Commissioners • Meet with County Auditor to assist with financial planning. • Best practice: Meet with each department head to review budget and discuss revenue. • Hold public budget hearing. I.C. 31-1605 • Adopt budget.

7. Role of Other Elected Officials • Provide budget requests and revenue estimate to Auditor (in a timely manner or Misdemeanor $50 fine I.C.31-1602.) • Provide justification for requests. • Attend public budget hearing to answer any questions if called upon. I.C. 31-1605 • Work with Auditor if have any unusual expenses or windfalls.

8. Budget Cycle • Newly elected, but inherit someone’s else budget. (fix it next go around)

9. Budget Cycle Cont. • Step 1: Auditor will notify in writing each department head to submit itemized revenue & expenditures for the budget before the 1st Monday in May. • Step 2: Department Heads file their preliminary budget with the Auditor by the Third Monday in May. • Best Practice: BOCC & Auditor should meet with Department Heads to review requests and gather input.

10. Budget Cycle Cont. • Step 3: Auditor due date to submit recommended budget to BOCC is First Monday in August. I.C. 31-1604 • Step 4: Auditor must publish tentative budget Third Week in August and notice public budget hearing. This must include two previous years actual amounts expended and current fiscal year divided into two categories: wages and expenses.

11. Budget Cycle Cont. • Step 5: Public Budget Hearing is held on or before the Second Monday in September (usually the day after Labor Day, so much for a long weekend). • This is the time for public input. The hearing could last the length of time it takes for the Auditor to read the budget into the record or hours of public input. Good luck to all!!! • Budget can not increase once published. • BOCC adopts budget by resolution.

12. RESOLUTION NO. 06-09-29 THE BOARD OF COUNTY COMMISSIONERS CLEARWATER COUNTY, IDAHO WHEREAS, the Clearwater County Commissioners held a public hearing on September 5, 2006 at 10:00 am to consider the adoption of the 2006-2007 Clearwater County Budget, and WHEREAS, testimony was taken and discussions were held on the published proposed Clearwater County 2006-2007 Budget at this public hearing, NOW, THEREFORE, on motion made, seconded and unanimously carried, IT IS RESOLVED; that the 2006-2007 Clearwater County Budget that was published on August 10, 2006 is hereby adopted with one amendment increasing the Treasurer’s A budget by $416.00 and decreasing the Commissioner’s B budget in this same amount. No change in the total published budget totals. DATED and DONE this 5th day of September, 2006. ____________________________________ Don Ebert, Chairman ATTEST: ____________________________________ Stan Leach, Commissioner _______________________________ ____________________________________ Robin Christensen, Clerk J. Pete Curfman, Commissioner

13. Budget Cycle Cont. • Fiscal year ends September 30th and the new one begins October 1st. (different than the State of Idaho and the calendar) I.C. 31-1601. • Cash basis resolution needs to be done each year to authorize counties to accumulate fund balances & carry them to the next fiscal year. I.C. 31-1605A

14. RESOLUTION NO. 2006-09-146 A RESOLUTION AUTHORIZING NEZ PERCE COUNTY, A SUBDIVISION OF THE STATE OF IDAHO, TO OPERATE ON A CASH BASIS, FURTHER PROVIDING EFFECTIVE DATE.  WHEREAS, pursuant to Idaho Code Section 31-1605A, the Board of County Commissioners are authorized to accumulate fund balances at the end of a fiscal year and carry over such fund balances into the ensuing fiscal year sufficient to achieve or maintain county operations on a cash basis; and WHEREAS, Nez Perce County will have an estimated Reserve Fund balance of Ten Million Seven Hundred Eighty-One Thousand Six Hundred Eighty-Eight Dollars ($10,781,688.00) at the end of the 2006 fiscal year which they desire to carry over to the 2007 fiscal year. NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED THAT: Section 1:  Pursuant to Idaho Code Section 31-1605A, the Board of County Commissioners hereby approve the estimated Reserve Fund balance of Ten Million Seven Hundred Eighty-One Thousand Six Hundred Eighty-Eight Dollars ($10,781,688.00) at the end of the 2006 fiscal year which they desire to carry over to the 2007 fiscal year. Section 2:  This resolution shall take effect and be in force from and after its passage and approval. This resolution is duly approved and adopted by the Board of Nez Perce County Commissioners on the 25th day of September, 2006. BOARD OF COUNTY COMMISSIONERS Nez Perce County, Idaho

15. Property tax State sales tax Inventory phase out State Liquor funds Payment in lieu of taxes Highway user revenue Motor vehicle Drivers license Boat & snowmobile Alcoholic Beverage License Inheritance tax Court revenues Building permit fees Solid waste fees 911 fees Indigent reimbursement Fees from offices Interest Budget Content-Revenue

16. Budget Content-Revenue • Estimating new fiscal year’s revenue • Calculate per month revenue • Review prior years actual revenue (conservative) • Be aware of timing of revenue-i.e. quarterly receipts; tax collections • Estimate revenue for the remainder of the current year • Estimate current year & add percent increase • Carryover

17. Budget Content-Revenue • Property Tax • 3% cap (I.C. 63-802) • New construction • L-2 • Levy limits each fund • Foregone amounts • Annexation • Certification (other taxing districts)

18. Budget Content-Revenue • Restricted revenue • Hwy user • Court revenue • Snowmobile/Waterways • 911 fee • Unrestricted revenue • PILT • Sales tax • Property taxes (within statutory limits)

19. General or Current Expense Airport Ambulance Ad Valorem (Revaluation) Justice Ignition Interlock District Court Election Consolidation Fair Grounds and Buildings Health District Historical Society Charity (Indigent) Trusts Drug Court Road & Bridge Community College Parks & Recreation Pest Control Snowmobile Solid Waste Tort Veterans’ Memorial Waterways Noxious Weed 911 Emergency Communications Enterprise Funds Budget Content-Funds

20. Budget Content-Expenses • What are “A” and “B” budgets? • A budgets are salaries & wages only • B budgets are everything else • C budgets (not always used) are capital expenses

21. Budget Content-Expenses • How to compute our employee’s wages? • Straight percentage across the board • Set dollar amount across the board • Step & grade system or market longevity system • Distribute a set dollar amount for Department Heads to handout as merit • Make it equitable & don’t get sued Note: Salaries are set by BOCC I.C. 31-3106

22. Budget Content-Expenses • What about employee benefits? • Health, accident, & life insurance • Vacation, sick leave & personal holiday • PERSI • Social Security • Worker’s Compensation • Unemployment

24. Budget Content-Expenses • What about supplies? • Review the previous years • U.S. Communities-NACO.org • Plan for the unexpected (within reason) • Association dues • Know what you can afford

25. Budget Content-Expenses • What about other expenses? • Typically BOCC set a threshold for pre-approval, whether it is $500 or $5000 that is a policy decision. • Officials are personally liable for unauthorized purchases. I.C. 31-1607 (exceed appropriation) • Be aware of when revenues are received. • Check not only if budgeted but if there is revenue. • Large expenditures need to check with Treasurer on investments. • Public purpose allows BOCC to contribute to private non profit groups. I.C. 31-866

26. Budget Content-Expenses • What if a budget looks like it will be overdrawn? • Open budget and make adjustment in public hearing with proper notice I.C. 31-1605 • Misdemeanor if go over I.C. 31-1607

27. RESOLUTION NO. 06-03-10 THE BOARD OF COUNTY COMMISSIONERS CLEARWATER COUNTY, IDAHO WHEREAS, on September 6, 2005, the Clearwater County Commissioners adopted the 2005-2006 fiscal year budget for Clearwater County, and WHEREAS, there have been higher than anticipated costs in the Sheriff’s Budget for mental holds, and WHEREAS, there is money budgeted in the Justice-General Reserve account to cover unanticipated costs in the Sheriff’s Budget. NOW THEREFORE, on motion duly made, seconded and unanimously carried, IT IS RESOLVED, that the Clearwater County Auditor is hereby ordered to transfer the sum of Twenty Thousand Dollars ($20,000) from the Justice-General Reserve Budget (08-29-499-00) to the Sheriff’s Budget (08-04-596-06) to cover the increased costs for mental holds. DATED and DONE this 6th day of March, 2006. ______________________________ Don Ebert, Chairman ATTEST: ______________________________ ______________________________ Stan Leach, Commissioner J. Pete Curfman, Commissioner ______________________________ Robin Christensen, Clerk

28. Budget Content-General Reserve • What is a general reserve? • BOCC has right to make general reserve appropriations, not to exceed 5% of current expense budget. I.C. 31-1605 • This may be used in the event of unforeseen contingencies requiring money not placed in the budget to be expended. Require unanimous vote of BOCC.

29. RESOLUTION NO. 06-09-30 THE BOARD OF COUNTY COMMISSIONERS CLEARWATER COUNTY, IDAHO WHEREAS, on September 6, 2005, the Clearwater County Commissioners adopted the 2005-2006 fiscal year budget for Clearwater County, and WHEREAS, after the budget was adopted, Clearwater County became aware of unanticipated revenue that was not budgeted in the 2005-2006 Clearwater County Budget, and WHEREAS, after the budget was adopted, there were unanticipated changes that needed to be made in the 2005-2006 fiscal year Clearwater County budget, and WHEREAS, pursuant to Idaho Code 31-1605, the county has the authority to re-open it’s budget if unanticipated revenue will be received so that it can be expended by the county during the current fiscal year, and WHEREAS, on September 11, 2006, Clearwater County did hold a public hearing to consider re-opening the 2004-2005 fiscal year budget to include unanticipated revenue and to make needed adjustments in budget amounts, NOW THEREFORE, on motion duly made, seconded, and unanimously carried, IT IS RESOLVED, that the Clearwater County Auditor is hereby ordered to open the 2004-2005 Clearwater County Budget to show unanticipated revenue in the amount of Seven Thousand Five Hundred Dollars ($7,500) to the Sheriff’s Justice Fund. This money was received from the Nez Perce Tribe to help defray the impact of rising fuel costs to the Clearwater County Sheriff’s Office DATED and DONE this 11th day of September, 2006.

30. Budget Processing • Who is responsible for the bills? • Department Head submits claim to Auditor • Auditor reviews the claims and flags specific claims for the BOCC • BOCC review & approve claims • Best Practice is to review summary sheet of bills & look at actual receipts (including credit card statements)

31. Budget Processing • What expenses are not allowable? • Alcohol with dinner • Work done on driveway • Pay relative • Use county resources for personal expense • Clothing for work (it is required – just don’t expect the county credit card to pay for it!) • Mileage to and from work • Best Practice: Gifts-employee or other

32. Budget Processing • Can you transfer money? • If it is unforeseen, then by an unanimous vote of the BOCC (yes, all 3) the Auditor may transfer from a non restricted fund. I.C. 31-1508 • If fund becomes inoperative for its purpose, then the BOCC may have the Auditor transfer to whatever fund they deem best.

33. Budget Processing • What if we have an emergency? I.C. 31-1608 • Must be caused by fire, flood, explosion, storm, epidemic, riot, or for the immediate preservation of order, prosecution of crime, etc. • Must have unanimous vote by BOCC and may use any money on hand in the county treasury, if insufficient money use registered warrants.

34. Budget Processing • What is a registered warrant? • A warrant is an order drawn by the BOCC directing the Treasurer to pay specified amount to a person. • A warrant that has been issued that cannot be redeemed because of lack of funds. I.C. 31-1608 • Once BOCC determines it is necessary to register warrants; adopt a resolution by unanimous vote, establish an emergency. • Resolution should be reviewed by Prosecutor and an opinion letter stating resolution is proper and the purpose of warrants are necessary. • County Treasurer contacts banks about available interim financing options and reports to BOCC.

35. Budget Processing • BOCC directs Auditor to establish Warrant Redemption Fund. • Next fiscal year levy specifically for Warrant Redemption Fund. I.C. 63-911. • Can also transfer from other funds to avoid Warrant Redemption Fund. I.C. 63-913.

36. Budget Processing What is a Tax Anticipation Note (TAN)? A TAN is an advance of funds against the collection of future property taxes on a levy already made. Usually necessary is early months of fiscal year or just prior to January or July tax turnover. Treasurer contact lenders for rate quote. May be possible to borrow from other funds as allowed by I.C. 31-1508 to avoid TAN.

37. Financial Reporting The purpose of financial reporting is to communicate and keep informed the elected officials as well as the public. Each official has a fiduciary responsibility to safeguard public money.

38. Financial Reporting • What is GASB 34? • Government Accounting Standards Board establishes accounting reporting standards at the state & local level. I.C. 31-1509 • GASB’s purpose is to assist governing bodies to evaluate their operation and provide the public with easier to read reports due to the standardization of reporting. • Each department must keep track of all assets/inventory according to your county policy.

39. Financial Reporting • The County Auditor is required to prepare an annual financial report by the 2nd Monday in January. I.C. 31-2307. • In addition, must have an audit performed by outside auditors. I.C. 67-450B • Other audits • Waterways/Snowmobile • Grants • PERSI • Workers Comp.

40. Financial Reporting • Court Financing Report • Waterways Report • Annual Highway Report • Dept. of Census Report • Grant Reporting • IAC Survey (Wages) • IAC Survey of information for Legislature • Payroll: quarterly, annual W-2, 1099 • Tony’s NUMEROUS Requests!!!!!!!!!

41. Financial Reporting • Fund Balances • Three months of operating costs • Some funds have limits of amount of fund balance, (for example District Court I.C. 31-867)

42. Fraud • Credit cards (I.C. 18-5701 misuse of public $) • Borrowing lunch money from cash drawer • Petty cash • Pocketing cash as it comes in • Accounts payable-fake invoices or companies • Double billing

43. Misc. • Can we legally sell county property? • Tax deed sales require specific due process by tax collector. I.C. 31-808, 63-1005 & 63-1006 • Surplus property (not exceeding $250) may be sold without notice to the public. Otherwise, public notice must be given in the newspaper and public auction held can use internet. • BOCC can transfer to another taxing district or a nonprofit if declared in the public interest.

44. Misc. • What is an Urban Renewal? I.C. 50-2001 • The purpose is for infrastructure improvement for the prevention of development or spread of slums and blight. • Allows for cities or counties to create an urban renewal agency. • This entity receives the value of new growth within their district boundaries and other taxing districts do not receive that value until the end of the plan or 24 years.

45. Misc. • What is a LID? • Local Improvement Districts are created to improve sidewalks, streets, sewers, and utilities. • A petition of the residents is presented to the BOCC and then bonds are issued after following all the procedures. I.C. 50-1701 through 50-1770

46. Misc. • How to handle grants • Best Practices: Advise BOCC & Auditor of a grant application, which the BOCC approves. • Once a grant is awarded by funding agency, BOCC accepts it. • Auditor is the financial officer (budget may need to be open for unforeseen revenues). • Most granting agencies audit to ensure that money is spent according to the grant. • Grant timing might not follow county’s fiscal year. • Be aware of matching requirements (ongoing requirements such as county funding newly created positions under the grant).

47. The END