TO:            Genesee County Legislators, Fellow Employees and Geneseeans

FROM:             Jay A. Gsell, County Manager/Budget Officer

DATE:             January 25, 2017

SUBJECT:       Adopted 2017 Budget

The 2017 County’s Adopted budget for all funds amounts to $145,617,001 and includes a recommended General Fund (A Fund) budget of $103,783,845, which is that portion of the annual County budget that directly impacts the general County property tax rate under the now 6^th year New York State Property Tax Levy Cap.  Compared to Adopted 2016 all funds budget this is approximately $5.2 million less in appropriations – 3.46% less and the General Fund recommendation is 3.57% less than the Adopted 2016 Budget.

This General fund budget resulted in a property tax rate of $10.07 which would generate $28,699,115 in property tax levy but for the first time in six years exceed the New York State tap cap allowable growth and need a County Legislature override of the tax cap to adopt a balanced budget for 2017 (see attached tax cap formula).  The additional $874,566 in property tax levy in this budget that exceeded the tax cap levy ceiling/OSC formula restriction includes the County using the reduced PILOT revenue from the renegotiated Empire Pipeline PIF that GCEDC has presented to the County Legislature which by converting same PILOT value into a community benefit agreement for infrastructure can help the County complete portions of the Phase II county wide water project estimated at $4 million in the northwest corner of the County adjacent to the STAMP mega site as well as pay off the financing for the Agri-Business Park in Batavia which infrastructure improvements were critical in bringing in the two plants there and making the 200+ acres truly “shovel ready”/ ready for business.

This 2017 County Budget includes the 8-9 New York State mandated local fiscal shares of programs/services that NYS counties cannot unilaterally change or even stop funding.  These programs/local shares, the largest of which is Medicaid consume 78% -80% of our 2017 tax levy and amount to $22,218,508 of same.  New York State once again has refused to reign in these mandates and to add insult to injury did not or will not fund the latest increase in full time District Attorney Salary from $152,500 to $183,350 and whiffed on the 7 year take over/reimbursement of indigent defense costs which for Genesee County is an all in expense of $1.4 million less the current Indigent Legal Services funding or approximately $1.2 million.  This continued disregard of New York State’s culpability in the County tax rate increases over the past 40 years is something we have learned to live with but to be additionally mocked by Albany for not being able to control our expenses or tax rates and blaming us for “living with these unfunded mandates: is disingenuous at best and necessitate county governments cutting non-mandated, quality of life programs, reducing funding for vital community agency programs and depleting our fund balances in lieu of 10-30% property tax levy increases neither option of which is sustainable nor logical in Tax Happy New York State.

The County budget includes a contingency plan at $15,781,000 for continued County ownership of the Genesee County Nursing Home which the pending sale of to Premier Healthcare, LLC has been delayed by the glacial review and approval process of our Adult Home Certificate of Need license transfer.  The County and Premier are still anticipating closing of the transaction before March 1, 2017 but in dealing with New York State nothing positive or expeditious can be assumed.  As of January 1, 2017, the daily operations of the Nursing Home were turned over to Premier while we await the conclusion of the real estate sale.

The proposed Genesee County Nursing Home 2017 budget of $15,781,000 is balanced and does not include any IGT County/federal revenue impact as that potential payment will likely be accommodated with net sale proceeds of the transfer of asset from the County to Premier Healthcare and a portion of the IGT reserve the County has due to the significant delay in the State and federal approved IGT payments from 2014 and 2015.

As far as capital funding and our road and bridge infrastructure and long term plans for same outlined recently by our County Highway Superintendent, the resources for 2018 and beyond will very likely be a combination of debt, potentially revised sales tax growth sharing under the County’s very generous 50/50) split with other local governments presently in negotiations and some of the net proceeds of the Nursing Home sale once all obligations are settled in late 2017 or early 2018.  The County has responsibility for all bridges over 5 feet in the County and 250 lane miles of roads as well as a potential $42 million County jail CIP which none of the other local governments in Genesee County have such major infrastructure responsibilities.

This budget does include a 10% reduction for 10 selected outside funded county agencies that are not the Chamber of Commerce 100% generated by bed tax/TPA funds, Genesee Finger Lakes Regional Planning or GLOW solid waste, the latter two of which include inter municipal agreements that our County can’t unilaterally change funding for.  This recommendation reflects the conundrum counties face in dealing with New York State mandates and decisions locally that affect essential, quality of life programs.

The only new personnel in this almost $104 million general fund budget are two full time corrections staff who will be committed to female detainee jail transport in what has become placement all over Western New York, even into Steuben and Alleghany Counties and presently is a daily drain on the Sheriff’s Road Patrol who have been substantially handling this responsibility.  It is anticipated that these two new Corrections Officers blended with some part time certified retired peace officers will facilitate better day and evening shift road patrol presence across the County.  There are approximately eleven “new” deputy sheriff people replacing retirees/transfers which hopefully by the first quarter of 2017 will have the Road Patrol Division at full strength, Barring any more retirements/separations in early/mid 2017.  A new part-time community health nurse in the County Health Department coupled with our two County (Genesee/Orleans) shared services agreement has no net local share cost in this budget and two reclassified Mental Health Clinic positions in 2017 are part of the deletion of two 2016 budgeted positions as County Mental Health continues its reorganization to be better prepared for Medicaid managed care/Health home services and reimbursement.

The budget includes already negotiated/executed collective bargaining agreement changes for members of SEA, CSEA, AFSCME and the General Fund contingency account includes modest funding for a possible DSA contract settlement effective January 1, 2017.  Management salary changes for the approximately 100 County employees in this group would change based on specific performance review results with the range recommended from .5 – 1.5% over their 2016 salaries.  This also basically completes the implementation of our MAG report/salary modernization initiative that the County Legislature supported starting in 2015.

Funding for Genesee Community College – the sponsor share – is included at the same amount $2,539,374 as the adopted 2016 County budget.  Debt service for the two new buildings being erected on the Batavia campus is included in our annual debt appropriation which is approximately 50% or less of the total construction cost due to SUNY Capital Account funding and the Genesee Community College Foundation commitment to contribute $3 million to these capital projects and reduce the net County share.  Genesee County is still only supporting 6% of the overall GCC operating budget which is at or near the bottom of community college sponsoring counties in New York State

One of the major cost centers in this County budget is employee healthcare and for 2017 an approximate 14% premium equivalent increase is included to fund our 2,000 participant/member users between Genesee County and the Community College workforce.  The health care plan which has been self-funded since approximately 1990/91 is in need of additional changes to employee co-pays and cost sharing on top of the current 10-20% employee contributions to the monthly premiums.  The advent of high deductible/health savings account features is upon our County workforce and will be a major factor in union negotiations and labor management discussions as we continue to access affordable, quality health care for employees and dependents and control the County costs as we can no longer use health plan reserves to offset annual plan benefit cost increases.  Working with our TPA, Independent Health and Health Plan Consultants, Premier Consulting Associates the County will present options that hopefully most employees can accommodate that will include more proactive wellness/preventative measures and incentives as well as refocus on chronic diseases and health screenings/benchmarks for plan participants.

This 2017 County budget reflects somewhat the County economy which has an official 4% unemployment rate, a flat/no growth local sales revenue stream and a likely one time significant growth in assessable value ($96 million) which due to the State tax cap/levy growth restriction has provided temporary benefit in the general County property tax rate being adjusted “down” to $9.66/$1,000 prior to the budget being recommended to the County Legislature.  The Adopted 2016 County General Fund Budget included a $9.86/$1,000 tax rate; this 1% reduction in the County Manager’s recommended 2017 budget at $9.76 could have resulted in some County tax payers paying less on their County tax bill if their property values have no change over the past year.  The County Legislature decided to take a more conservative approach to use of reserves and fund balance and thus the adopted $10.07/$1,000.

The original requested 2017 County departments and outside agency requests submitted in early September 2016 would have required a $3.4 million increase in the tax levy at a possible tax rate of $10.77/$1,000.  Over the past eight weeks working with these departments and agencies and in conversation with the County Legislature, proposed expenses have been reduced and the use of $1 million in fund balance has been included to reach the $10.07 tax rate. 

Genesee County government continues to take a conservative, no frills, essential services approach to both service provisions and finances.  Knowing that New York State is unlikely to provide any near or long term fiscal relief from the 8-9 major mandated programs embedded in our County budget, I believe this proposed budget is a thoroughly vetted, justified, bare bones proposal that fulfills our obligation for mandated services and maintains reasonable quality of life/discretionary services/programs participation by Genesee County government. 

The public hearing for my recommended budget occurred on Wednesday, November 9, 2016 and the County Legislature adopted the official County Budget on December 14, 2016.

Going forward, the Departments and Budget Officer along with the NYS OSC stress monitoring profile and financial trend monitoring software outline will develop a 5 year future forecast of where the General Fund stands and what stressors are present but not necessarily all controllable to provide some context for discussion on non-mandated quality of life services and expenses and how our capital improvement needs over the next 20 years will be addressed and paid for.