Agenda 09/29/2009 Item #10B
Agenda Item NO.1 08
September 29,2009
Page 1 of 4
EXECUTIVE SUMMARY
Recommendation that the Board of County Commissioners direct the County
Manager or his designee to initiate all prudent and sufficient measures including the
processing of all necessary FY 2010 budget amendments to ensure that the Board's
General Fund (001) has sufficient cash available and on hand at October 1, 2009 to
meet Collier County's operational expense obligations until such time when the first
ad valorem property tax receipts are received.
OBJECTIVE: To ensure that the Board's General Fund (001) has sufficient cash on
hand at October 1, 2009 to meet the County's operational obligations for that period of
time until the first ad valorem property tax receipts are received in mid November.
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CONSIDERATIONS: Approximately 75% of the Board's General Fund (001) annual
revenue is ad valorem taxes. These taxes are predominately received between the middle
of November through February annually. The lowest ca:sh balances within the BCC
General Fund occur within a short six (6) week window just after the fiscal year begins.
The following table illustrates the beginning fiscal year cash balances within the Board's
General Fund for fiscal years 2008, 2009 and projected for 2010. In addition the table
depicts the lowest cash amount for that period of time prior to receipt of the first
significant ad valorem tax deposit in November.
FY 2008 FY 2009 Projected FY 2010
Beginning Cash $51,498,455 $24,331,318 $17,151,522
Balance - Board's
General Fund (001)
Lowest Cash $26,516,550 $5,106,437 ($10,705,261)
Amount
The noticeable drop in cash balance between 2008 and 2009 is due primarily to the lack
of interest income proceeds which normally would accrue to the Board's General Fund
monthly. For FY 2008, the interest - $24,384,015 was turned back by the Clerk on or
about October 31, 2008. The first ad valorem payment for FY 2009 was received within
the Board's General Fund on November 18, 2008. Likewise, the drop from fiscal year
2009 to 2010 can be attributable to the uncertainty with interest income po stings and the
reduction in other general revenue sources.
The beginning of the fiscal year normally requires immediate expense allocations from
the Board's General Fund for Constitutional Officer Transfers, Debt Service Payments
and other operational requirements including salaries. There are three (3) pay periods in
October 2009. At the beginning of FY 20 I 0, it is anticipated that the first week of
October will require the disbursement of an estimated $18,952,875 in payments. These
payments include 1/12 of the Sheriffs transfer obligation as well as debt service.
Agenda Item No. 10B
September 29,2009
Page 2 of 4
As a result the expected cash balance within the Board's General Fund on or about
October 5, 2009 is estimated at $254,535. This sets up a scenario whereby a negative
cash position will likely exist in the Board's General Fund during 14 of the 31 days in
October. Negative cash balances would continue during the first half of November and on
November 14, 2009 it is projected that the lowest negative cash point of ($10,705,261)
will occur.
Chapter 136.05 of the Florida statutes prohibits overdrawing of accounts by the Board of
County Commissioners.
Remedies:
1. Recognizing the cash flow situation, the County Manager has issued a spending
moratorium directive to all Division Administrators and direct report Directors
which requires the deferral of all non mission critical expenses during the period-
between October 1 and the middle of November.
2. The Office of Management and Budget along with their Divisional fiscal partners
will scrub the annual transfer schedule to determine if transfers due from the
General Fund can be reduced temporarily or deferred.
3. Available cash insurance reserves contained within Group Health and Life
Insurance Fund (517) up to an amount not exceeding $15,000,000 will be
temporarily transferred to the Board's General Fund (001) at the beginning of
October and immediately transferred back to Fund (517) when the first significant
ad valorem proceeds are received.
4. During FY 2010, the County Manager's staff will prepare the requisite
contingency plans to address any cash flow requirements in the Board's General
Fund (001) which may arise at the beginning ofFY 2011.
FISCAL IMPACT: Insurance fund cash reserves estimated at October 1, 2009 within
Fund 517 will total approximately $19.1 million dollars. FY 2010 budget amendments
will be necessary to facilitate the movement of budget and cash dollars between the
Board's General Fund (001) and Group Health and Life Insurance Fund (517). Please
note that the budget amendments will only total $15,000,000. The very short term use of
this reserve cash does not pose a problem to the funds operation according to the Risk
Management Director. As soon as the first significant ad valorem deposit is posted in the
Board's General Fund - expected on or about November 18,2009 - budget and cash will
be returned.
Interest at the prevailing rate received on securities will be paid by the Board's General
Fund (001).
Agenda Item No. 10B
September 29,2009
Page 3 of 4
GROWTH MANAGEMENT IMP ACT: There is no growth management impact
associated with this item.
LEGAL CONSIDERATIONS: The County Attorney has reviewed this item, which is
legally sufficient for Board action. -JAK
RECOMMENDATION: It is recommended that the Board of County Commissioners
authorize all prudent and sufficient measures including the processing of all necessary FY
2010 budget amendments between the Board's General Fund (001) and Group Health and
Life Insurance Fund (517) to ensure that the BCC General Fund (001) has suffici ent cash
available and on hand at October 1, 2009 to meet Collier County's operational expense
obligations until such time on or about the middle of November 2009 when the first ad
valorem property tax receipts are received and the borrowed money plus opportunity
costs can be returned to Fund (517).
Prepared by: Mark Isackson, Senior Management and Budget Analyst
Office of Management and Budget
Page 1 of 1
Agenda Item NO.1 OB
September 29, L009
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COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number: 10B
Item Summary: Recommendation that the Board of County Commissioners direct the County Manager or his
designee to initiate all prudent and sufficient measures including the processing of all
necessary FY 2010 budget amendments to ensure that the Boards General Fund (001) has
sufficient cash available and on hand at October 1 , 2009 to meet Collier Countys operational
expense obligations until such time when the first ad valorem property tax receipts are
received. (Mark Isackson, Office of Management and Budget)
Meeting Date: 9/29/2009 9:00:00 AM
Approved By
Leo E. Ochs, Jr. Deputy County Manager Date
Board of County County Manager's Office
Commissioners 9/23/20094:29 PM
Approved By
Jeffrey A. Walker, CPCU, Risk Management Director Date
ARM
Administrative Services Risk Management 9/23/20094:31 PM
Approved By
Mark Isackson Budget Analyst Date
County Manager's Office Office of Management & Budget 9/23/20094:34 PM
Approved By
John A. Yonkosky Director of the Office of Management Date
County Manager's Office Office of Management & Budget 9/23/2009 4:36 PM
Approved By
Scott R. Teach Assistant County Attorney Date
County Attorney County Attorney Office 9123/2009 4:44 PM
file:IIC:\Agendatest\export\135-September 29,2009\10. COUNTY MANAGER REPORT\!... 9/23/2009