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HomeMy WebLinkAbout012210mHARNETT COUNTY BOARD OF COMMISSIONERS Minutes of Planning Session January 22, 2010 The Harnett County Board of Commissioners met in special planning session on Friday, January 22, 2010, in the President's Dining Room, Marshbanks Residential Restaurant at Campbell University, Buies Creek, North Carolina. Members present: Staff present: Guest: Timothy B. McNeill, Chairman Beatrice B. Hill, Vice - Chairman Dan B. Andrews, Commissioner Gary House, Commissioner Jim Burgin, Commissioner Scott Sauer, County Manager Tony Wilder, Deputy County Manager Dwight W. Snow, County Attorney Sylvia Blinson, Finance Officer Amanda Bader, County Engineer Jennifer Slusser, Staff Attorney Trinity Faucett, Director of Human Resources Phyllis Owens, Director of Economic Development Steve Ward, Interim Director of Public Utilities Glenn McFadden, Interim Assistant Director of Public Utilities Gina Daniel, Acting Clerk Tom Woerner, Reporter, Harnett County News Chairman McNeill reconvened the Board of Commissioners at 8:00 am. 8:00 am Clarify expectations roles of governance and Scott Sauer Mr. Sauer noted articles "Values Underlying the Groundrules" and "Groundrules for Effective Groups" published in Popular Government Spring administration > Board expectations ➢ Management's expectations: - adherence to adopted policy, statutes, and establish practices to meet those standards and requirements 1989 (handout 1). He referenced results of recent discussions with department directors regarding their priorities (handout 2). Mr. Sauer noted the need for a mission statement or vision for Harnett County and distributed samples (handout 3). Harnett County Board of Commissioners January 22, 2010 Planning Retreat Page 1 of 9 c) five year strategy There was also stated interest for improving use of existing facilities, reducing • Mr. Sauer shared a draft copy of "2009 Year In Review" (handout 4) a) a) 0 0 o E co E 0 U i 0 , 0 ) m#4 ° v 0_ O.. 4�. U +5 = -0 c ° 0 0 0 •tn 0 bA O y 'A. = c2 O 0 s Z. t U ._. n +. c 7, Y cn aUi • o cd ¢ x v� U E 0 ,� E x O al ' N ,, 0 4 � •U cv. 0 A ) -0 0 3 ` i •> U 0 0 p 2 0 •....., `n 0 cn o O U o o vi 0 O v00 0 b~ OA ca. O , U U 0 „x I FCi et a) A 0 -- U 00•' i. r. c d w .� U d ...i 0 N bA O. ? = v 0 a' tO O O 4-i U O 0 U 0 u $••� 0 O a�i �$ U 1 s�`n' 0 . bbo 'O. O a) T3 ---i N O N .� • 0 WI +� , • � +.4 i- a� • • •••••I ;U" 0 0 W En En U o O. . O. > Personnel changes > Strategic initiatives /accomplishments > Unplanned events > Progress on goals, projects, established goals > Failures, shortcomings, do- overs? 0 o ..O o W ON 01 cn N r a cd a) +3 fl d O c O 3 u 3 O O d O U U " O O "e:' p o ad o Li" flFi 0 a) .0 al 0 Di y N O N t 0. 0- U E J .0 N r-, 0 U •0 ? Ms. Blinson was asked to look at a possible hardship policy in regards to paying ambulance fees. Ms. Blinson was also asked to provide the cost of upcoming retirees. Ms. Blinson discussed the organization and training of Finance Office staff. They are working on a centralized contract system. Commissioner Burgin requested that Ms. Blinson meet with municipal finance officers. Together Committee is in the process of refinancing some of their debt. Mr. Wilder reported that 2009 revaluation appeals were complete with only 16 out of 6000 taking their appeals to the next level, with a fiscal impact of $800,000 reduction in the tax levy. Chairman McNeill reported that the BRAC Eastern Regional Task Force has asked the Govern to consider imposing a $.01 sales tax that would sunset after 30 years to fund future school growth. Commissioner Burgin asked about the possibility of special tax districts and stressed the need to reuse old schools short term. He said the public would not stand for a tax increase. He confirmed that Harnett County is typically on a four year cycle of tax reval. o 5 m .9 > ›-> al j\ ® En \ 0 @ Continued Fiscal Trends, Budget Commitments, Resource Demands k o 44 a): :® o p / / § 2 ' o § { •\ \ a'° > ¥ § c § 'q t S 3 t \ 0 § \ E " ° 0 / \ § o � o § `§ MS 0 0 Ct: f / 0 0 0 �ƒ 2 § § ��2 . a) ~ �' ® •_ o q m k§ o 0 -] a] / ® ® U . .2 f § / O o ° / 3 7 : ƒ / . k g aq q / - Q 2 w j 0[ A A A A A A A A A J including 2010 Census c -- § o \ Commissioner Andrews moved to approve the Request for Contract Amendment to the Engineer Services Agreement with Marziano & McGougan, PA in the amount of $95,000 for East Central Water & Sewer District of Harnett County. The amendment was pulled from the January 19t consent agenda. Vice Chairman Beatrice Hill seconded the motion which passed unanimously. Board of Education (BOE) members Donna McNeill, Thomas Womble, Craig Matthews, Billy Tart and Vivian Bennett joined the Harnett County Board of Commissioners for lunch. Also attending was Superintendent Phil Ferrell, Finance Officer Bob Troutman and Sylvia Wallace who is Clerk to the Board. $117 Million The BOE is currently looking 120 acres of suitable land in the proposed "circle of need" to start construction on a high school and middle school including a park and community area. Mr. Ferrell reported that the BOE has a middle school design but does not have a site yet selected. Site requirement are: high school — 60 acres middle school — 40 acres elementary school — 20 acres Mr. Ferrell told the Board of Commissioners that the BOE would present their budget needs to them on March 26, 2010. He noted that the BOE would need four buses in 2011 ($86,000 per bus). He also noted that the state has instructed them to prepare for additional cuts. Mr. Ferrell reported that the BOE currently needs $1.7 Million for maintenance and repair of facilities. Steve Ward, Glenn McFadden and Amanda Bader 0 0 0 O "0 W tFI 0 Ct 0 projects) plus school utility extensions ➢ School Boone Trail /Johnsonville Wastewater extensions ➢ East Central Water Improvements Lunch with the Board of Education O CI Ca C "CI W O "0 i• Cl O PP i bA r.+ tu cU O it O O •-1 O O N al kn d- c Q, 6 o *FA o�v, an t 0 U� o o N � N N U g 2 Given the Qualified School Construction Bonds were not sold the money will go back to the state for reallocation. The BOE has been lead to believe that the formulas might change to consider high growth areas and possible incentives to purchase bonds. It was confirmed that Harnett County Public Utilities will bare the cost of running sewer lines to the new Boone Trail School. Mr. Ferrell mentioned the possibility of the BOE formally requesting the Board of Commissioners to add a 1/4 cents sales tax referendum to the November ballot. Mr. Ferrell told the commissioners that it would cost a significant amount of money to bring the old Shawtown School up to code and then it would only be able to handle one grade level. Mr. Sauer noted USDA's desire to help Harnett County with schools but we must obligate by August 2010. It was the consensus of the Harnett County Board of Commissioner for staff to staff to move forward with the Memorandum of Agreement between Harnett County and with the Good Hope Board. Mr. Sauer reported that USDA has specific loans for libraries. It was the consensus of the Board to move forward with discussions with the USDA for funding options for each of the projects and report back to the Board. t.. O i. 0 O g4 e bA cLe a) i." O h O "1:3 V W School Construction ($186 million) verify cost estimate, explore other design consultants > Inpatient Mental Health —Good Hope facility renovation > Library in Western Harnett ➢ Probation Offices in old detention center o o tO C.F1 at-4 0 o N WN >a N U O rTi rn 0 urrnwu reeorrrrrienUauorr 10 purr iviarziano ana rvicuougan Orr or the Brightwater project, and the County/HFTC will place project coordination under the firm of Withers and Ravenel Inc. In regards to the Wastewater Master Plan, Mr. Ward reported that they are cutting down on the scope of the RFQ and letting firms send in qualifications. Mrs. Bader noted that basin -wide nlannino is needed Ms. Owens noted the need for a new strategic plan for Harnett County and financing. Phyllis Owens g 1) o 0 U I P•, —= •m an: rwl .vr .QCO .0 A= ., 0 O co 0 0 0 N c$ — 1) 0 +' 0 3 y a 0 • - 3 Cl.) � i 3 ate, t 3 U+ 0 '"' a ' cu v. c. O 0 O� 0 O� U�✓wQiV) aaUw�a., 'o Q., A A A A A A impressions from new director ➢ Harnett Health Systems— hospital ground breaking /site development thru HFTC ➢ First Choice — community health center facility in Lillington & ECU/UNC dental clinic ➢ HFTC Allied Health building; West Park grant funded improvements ➢ Campbell University— cooperative facility usage and planning e -c is 0. rte, Q. O ' U +' v p .a.) d 0 0 rn a� v c� cn 0 ;� a -� 0 .0N 5' at 0 ac 0 i"., a3 64 0 P•a 0 N O +' +' s... U N W Oo U 5 x '° 0 0" -inn+ tO i 0 .? a) U 0 0 bA N N a) N 0 U c on 0 cd 0 0 o 4-4 y 0 O • 0 coo - U I 2 N 0 O 0 at U >, 0 0 tat) O O a) 0 0 0 U • Di A 0 0 0 0 A A A 0 DC 5 0 U ° c o 4 0 0 U U o 0 0 0 0 (S, G.4 a) c .o 0 • O bO a 0 U E E 0 0 0 A A A 0 0 0 rip U U c U g tID rn bA 0 . o '0 0 U 0 -O a) O 4-, � N U U Q U O U 8 O a w A A A 0 0 O Access to Info O U 0 A -d O U 0 O 5 0 0 �i • g U a) rn ., o up 111 U N .� s. 0 0 5 g . 1' 1) "a 0 RI - 4-4 W -d 00 wv�� 4AAAA 0 0 0 0 0 U ➢ Retirement 0 0 . U "O i0-' 3 0 0 4-i la" bO zQ A A i a) 0 4-+ 0 CD rn MI IF N � N cg a) Handout 1 2010 Planning Session Values Underlying the Groundrules 1) Valid information. 2) Free and informed choice. 3) Internal commitment. Group Groundrules I Share all relevant information. 2) Be specific —use examples. 3) Explain the reasons behind your statements. questions, and actions. '4) Focus on interests, not positions. 5) Stay focused: discuss a topic enough for everyone to be clear about ft. '6) Don't take cheap shots. 7) Disagree openly with any member of the group. t 8) Discuss undiscussable issues. . 9) Share appropriate information with nongroup members. 10) Make statements; then invite questions:'.: 11) Test assumptions and inferences publicly..:; .: 12) Agree on what important words mean. ;. 13) Jointly design ways of testing disagreements and solutions. 14) Expect all members to..identify and solve problems. 15) Make decisions by consensus. , 16) _ Do self - critiques. Roger M. Schwarz The author, an organizational psychol- ogist. is an Institute of Government faculty member who specializes in organization- al change and conflict. Groundrules for Effective Groups Why Is it that some groups are able to tackle difficult tasks. pull together, and solve problems in a way that makes their groups effective while other groups are overcome by their tasks even though their members have the necessary tech- . nical skil)s .and are highly motivated? One reason is that some groups have an effective set of groundrules — implicit or explicit —that guides their behavior. When. members follow these ground. rules, they are better able to communi- cate handle conflict. solve problems, and make dedsions. In this article I describe a set of six- teen groundrules that groups can use to . work more effectively. I explain why they work and, using specific examples, illus- trate how to use them. A group can . benefit from these groundrules to the extent that (I) it is responsible for solv- ing problems, (2) it deals with complex .or nonroutine problems, (3) each mem- ber. is treated as making an important . .contribution. (4) group dedsions-require the commitment of every member to be ,,effectively implemented, (5) the group meets:legularly, and (6),the group has .. suffident • time to solve problems. ...Groups for which the groundrules are .appropriate include management teams. regular staff meetings, and task forces: With some modifications. they also. are appropriate for elected or ap- pointed boards. Although these groundrules can help a group become more effective they are . not a panacea. The groundrules neither .replace the struggles of group develop. ment nor reduce the risks of openness or overcome the lack of trust that often prevents groups from using them in the first place. Using the groundrules will not ensure that members will agree with each other, but it will Increase the likeli- hood that conflicts between members will be constrictive Finally, the ground - rules are not a quick solution. Although they are easy to understand, they are difficult to implement To use them ef- fectively.' a group must practice them regularly over time. The groundrules are based on three values: valid information, free and in- formed choice and internal commit- ment) To solve problems effectively, a group must have valid information. Max - Imizing valid Information means that members share all Information releva( to an issue In addition, they share tt information in a way that enables•other members to determine for themselves whether the information is valid. The second value, free and informed choice. re- quires • that members make choices based on valid information and that they can define their own objectives and the methods for achieving those objec- tives. And the third value interval commit- ment . to - .the l . dedsions, means that members feel personally responsible for . the 'Oilskins the group .makes..laach _memberis.coriunitted to the .dedslon .because elt is intrinsically satisfying, not . because'there are rewards or penalties_ leading him or her to be committed, as In the case of "external" commitment The three values reinforce one another. Members require valid infor- mation to make an informed choice 'Wheninemtiers make free choices, they aremore likelyto, be internally commit ...ted to 'those choices. When members are internally committed to decisions, they are more likely to monitor the de- cisions to see that they are implementer' effectively. This In combination with the Spring 1989 / 25 hers to seek more valid information.2 The Groundrules Just as the groundrules are based on three reinforcing values. they also are supported by each other and work together. To fully appreciate this. think about how each groundrule reinforces the others) 1) Share all relevant infor- mation. This groundrule means that each member tells the group all the informa- tion he or she has that will affect how the group solves a problem or makes a dedsion. The sharing ensures that mem- bers have a common base of Informa- tion. and it indudes sharing Information that does not support your position. For example, imagine that the group is deciding whether to institute flexible working hours in the department. You want very much to have flexible work- ing hours but think that it may require more careful coordination of scheduling. You also know that if others knew of the th Increased difficulty they might not be a as supportive of the idea. Her sharing t all relevant information means-telling w the group about the possibility of in- m creased scheduling difficulties, even th though the information may reduce the chances that flexible hours will be estab- b fished. One indicator of whether mem- to bers are sharing all relevant information s is if they are sharing information that do does not support their positions. in �2) Be specific —use exam- m plea Specific examples use " 1 directly observable behaviors da ®000 0000 0000 0000 whether Sam's and Joe's section of the report is complete and whether they distributed it. 3) Explain the reasons be- hind your statements, ques- tions. and actions. This groundrule simply means telling others why you are doing what you are doing. It is part of sharing all relevant information. For example. if you ask the group for statistics on the num- ber of days that people are late to work. you might say. "1 am asking for this in- formation because it will give me a bet- ter idea of how flexible working hours may have an effect on tardiness and ab- senteeism." Explaining your reasoning helps people interpret your behavior correctly and reduces the chances of people assuming or inferring things that may not be true. 1 will discuss this fur- ther in the section on testing assump- tlons and inferences. 000® 4) Focus on Interests, not po- 0000 sitlons.4 Focusing on interests 0000 enables members to share 0000 relevant information so that eycan solve problems in a way that Il members are internally committed to he solutions. To make decisions to hich all members are Internally com- itted, members must find a solution at meets everyone's interests. The most effective way to do this is for mem- ers to start by identifying their own in- rests:: Unfortunately, many groups tart by talking about solutions or posi- na -For example if the group is try - g to solve the problem of when to eet one member may start by saying. suggest we meet every other Mon - y at 7:30 A.M :' Another may respond . y position Is that we should meet the &1 day: of each month :' A'person takes a position because it eets or' his her interests a person's po- on'is simply that person's interests mbined in a 'way that can be im- mented: . For example the person o suggested meeting every other nday'at 7:30 A.M. was interested in eting early in the morning before k began to pile up on her desk. The rson who wanted to meet the second of each month was interested in ting immediately after a relevant bi- kly computer report became able e problem with starting with posi- ts that peoples positions are often Ou ®0 0000 0000; 1001001 0000 0000 0000 to describe people places. • "M ''things, 'or events. Unlike general state- • ''seco mentsti'specitIC examples maximize valid • information because they enable other • m members to determine whether the ex- 'Ski amples are valid. For, example. if Bob ' ` co makes the general statement to the ple group. "i think some of us are not do- wh ing their share of the work :' other mem- Mo bers cannot determine whether the me statement is valid. Members cannot ob- wor serve who "some of us" are; neither can pe they.directly observe whether some are day "not doing their share of the work:' In mee contrast If Bob states specifically, "Sam wee and Joe, you did not complete and dis- avail tribute your section of the report:' other Th members can determine whether the tions 26 / Popular Government si LutWILL CVCI1 wnen tneir interests are compatible This occurs because people tend to offer their positions after they have provided for their own interests, but before they have included the other members' interests. In the meeting ex- ample. each member's solution was re- jected by the other because it failed to meet the other's interests However had each member been aware of the other's interests. either one could have offered a solution -that satisfied both. To focus on interests rather than po- sitions. start by asking each member to list the criteria that must be met in or- der for him or her to accept any solu- tion. For example; if a group were to buy a car. one member might be interested in a car that can hold all six group mem- bers. Another might be interested in a car that uses fuel effidently, while a third member might be interested in a car that has a good repair record. Notice that none of these interests specifies a particular car (position). If a member states a position (such as " fwant to buy a Chevy"). point that out and then say something like. "What interests do you have that lead you to favor that po- sition?" Eventually, when every member has stated his or her interests and the group has agreed to use them. members can begin to generate solutions or positions. In the car example; solutions would be the names of specific cars, such as a Plymouth Reliant. When a member offers a solution. it helps to point out how that solution meets the interests on which the group agreed. In this way. the group is assured that there will be con- sensus about the solution. 5) Keep the discussion fo- cused. Focusing the discus- sion means ensuring that members are discussing rele- vant issues. everyone is focused on the same issue and everyone fully under- stands the issue Sometimes a group spends time discussing issues that ace irrelevant to its task. To get a group refo- cused on relevant issues. it helps to identify how the group got off the track: We began this discussion talking about work loads: and now we are talking about photocopiers 1 think we have got- ten off the track; do others agree ?" Other times group members are fo- cused on different issues. To get every- one in the group focused on the same discussion. it helps to identify the vari- 0000 11000 0000 0000 I I0000 000000 0000 ous issues that people have raised: "1 think we are talking about different things. it sounds like Leslie and Debra are talking about the problem of coor- dinating different schedules, but Nancy and Hank are talking about how it will affect the amount of work we can ac- complish. Do other people agree that we are talking about different things ?" If other members agree, ask which topic would be best to talk about first. One particularly crucial time when members need to be focused on the same issue is when the group is defin- ing the problem on which they will work If various members believe they are solving different problems, the group will not accomplish its task. Keeping the discussion focused also means discussing an Issue until all mem- bers understand it This ensures that every member will have the same infor- mation and will be able to make an in- formed choice If even one person does not understand something. the group needs to discuss it until it is clear to everyone in the group. 6) Don't take cheap shots or otherwise distract the group. At some time, almost everyone has been the target of a cheap shot a witty or snide remark that Insults someone. In addition to the fact that cheap shots make people feel bad and do not help the group. there is a very practical reason for not using . them. After someone is the target of an insult he or she usually spends some time thinking about the comment— wondering why the comment was made being angry, or thinking about clever comebacks to use later In the meeting. In any event, the person, usually is dis- tracted from the group's conversation. When distracted, he or she cannot par - tidpate In identifying and solving the problem. being discussed. As a result, the person may later withhold his or he consent When everyone's full participation is needed. members cannot afford to dis- tract each other. in general. members should not engage in any .behavior — such as sidebar conversations or private jokes —that distracts the group from its task Values Underlying the Groundrules 1) Valid information. 2) Free and informed choice. 3) Internal commitment. Group Groundrules 1) Share all relevant information. 2) Be specific —use examples. 3) Explain the reasons behind your statements, questions, and actions. 4) Focus on interests, not positions. 5) Stay focused: discuss a topic enough for everyone to be clear about it 6) Don't take cheap shots. 7) Disagree openly with any member of the group. 8) Discuss undiscussabie issues. 9) Share appropriate information with nongroup members. 10) Make statements; then invite questions. 11) Test assumptions and inferences publicly. 12) Agree on what Important words mean. 13) Jointly design ways of testing disagreements and solutions. 14) Expect all members to identify and solve problems. 15) Make decisions by consensus. 16) Do self-critiques. membership makes It difficult for some members to disagree with others. For example a member whose supervisor (or whose supervisor's supervisor) Is also a member of the group may find it difficult to disagree with him or her. Sometimes groups are made up of sub- groups. and members of one subgroup are reluctant to disagree with each other in front of another subgroup. For example managers may be reluctant to disagree with each other in front of. employees 8) it Is .alt right. to discuss . rindiscussable Issues. Every I group has what are piled un- .. If discussable issues These are r issues that are relevant to the'group's task but that members believe they can- a not discuss openly in the group without • se some negative consequences, Some ex- th amples indude members not perform- b ing adequately. members not trusting th one another, and members being reluc- su cant to disagree with their superiors who a are also group members Unfortunate- . to ly. because these issues often raise feel- ings, of mistrust. inadequacy, and defensiveness members usually deal with the issues either by not talking about them at all or by talking about nail them outside the group with people they trust However, such Issues a,. usually critical for the group to resat, and as long as they remain undlscuss- able the :.group's. performance may suffer. In order for the group to max- imize valid information and allow mem- bers to make free and informed choices members need to make undisscussable issues discussable within the group. One way to achieve this is to show that un- dIscussable;issues can. be discussed: ••1 ---lize;;wh at. l'm about to say may be considered an Undisassable issue but 'think we can,ie a more effective group wee ,da4wtththtsIssue. group mem- bers;.also. can explore. theIr concerns about di scussing.these,issu� without dually :•discussing the, issues the Ives It members can be assured that e_ir fears will not be realized, they will e more willing to talk openly about ese ;matters 'Finally.; once' the group ccessfully; dtsatsses one ndlscuss- bie issue; members may )tnd It easier deal with others .,, ., 9) Share appropriate infor- mation with nongroup mem- bers. • To be successful, a group must work well inter - y and must work well with. people Spring 1989 / 27 0000 00810 0000 0000 7) It Is all right to disagree openly with any member of the group. Disagreeing open- ly increases the amount of valid information. Sometimes the group 0000 0000 _ _ -1 ...... .. null, WC interdependent. Working effect with nongroup members includes tinually sharing information with seeking information from those wh work affects and is affected by group. Consequently. the group m decide what information is appropr to share with various nongroup m bers and how to share, it. 18b88 10) Make •statements; th Invite comments about BEERstatements. Making sta ments and then inviting co ments about tfiem means express your point of view (making sure to plain your reasons) and then aski others whether they agree or disagr ■ example, you might say, "I think would help to give department hea • their own budgets to work within; that their accountability will be co m mensurate with their responsibility. Bu '. some of you may feel differently. I'd like . to hear what each of you thinks about . my Idea, even if you disagree." Inviting others to comment on your statements encourages them to ques- don and challenge your ideas and helps ... turn -.the-discussion into a dialogue - .,rather than a.serfes of unrelated mono- .. Iogues .The discussion that results en- .ables , the.. group. to . determine . the . validity. of.tbe.ideas, and enables each • .member to (hake an informed choice it - rpiay.seem. • counterprodtictive to en- courage.disagreement, yet reaching a decision -to which all members will be ,.committed requires that members iden- . iffy .their, .disagreements and resolve y are LI IdL 000 was dissatisfied with his work. ively Furthermore Hank did not test his in- con- ference with Bob and thus could not and - . • find out that it was incorrect. Conse- ose quendy, Hank became angry at Bob un- the necessarily, ust Testing assumptions and inferences iate enables members to get valid informa- em- tion to make informed choices. if you are going to react to someone or make en the te- m- ing ex- ng ree. It. ds a decision based on something you in- ferred. make sure that you test whether your inference is correct. In this case Hank could have said. "When you started removing some of my duties. I - inferred that you were dissatisfied with • my performance Am I correct ?" q 12) Agree on what impor- d tant words •mean. This c to weaken her own position. Even when the disagreement is over and won the "loser" is still likely to believe she is right.. if Diane and Kate jointly designed a way of testing their disagreement, it would work like this: Once the two real- ized that they disagreed, one would sug- gest that they work together to discover the "real facts" To do so. each would have to be willing to accept the possi- bility that her information may be inac- curate. Then they would jointly develop a method to test out which facts are real. The method would include jointly agreeing on who to speak with. what uesdons to ask them. what statistical ata to consider relevant. and how to ollect the data. For example they might agree to speak with several em- loyees, to talk with a sample of callers rom past weeks, and to review an reed -upon number of written com- aints. Diane and Kate might also agree jointly speak to each of these peo- e so that both can hear the same con - rsation. Whatever method they use. Is critical, that both agree to it and ree to use the information that comes fro it. Once Diane and Kate have col - ed their information, they • should iscuss it together and reach a Joint de- on about the real facts.. • ne important question to ask when tly testing disagreements is "How is possible that we are both correct?" en members have different sets of because they are talking about rent times, places, or people. In this mple both Diane and Kate • could ve been correct; calls from citizens . d have been responded to timely in units but not in others. • jointly resolving disagreements. bers are more likely to be internal - mmitted.to the outcome because freely agreed to the .test ' • 14) All members .are ex- pected to participate in-a. phases of the process. This groundrule means simply that each members participation is essential for the group to work effectively. Be- each member has a different po- in the organization, he or she will have different experiences and about howto solve problems. In orthe. group.to benefit most from different views, everyone must ute to the extent that they have t information to share 0000 000* 0000 groundrule is an extension of so "be specific —use examples." p •.When members unintendonally agree or f 't. `_ • 1l)'fiest,assumptlons and in- ferences,,When.you assume __ ..something, you consideriit.to vu , ',true without verifying It rYh�'r1.3tou infer. sotnething.,.you draw :co Jclusiorts from things people say ...im - • , agitts., fors ainpje; t}iat B.ob:.the group's ,chairperson, . ..0bser�tes .;that ;Hank, although very, .productive, has consider - ::eblY. more. work than any other group •meriitber. To. lighten Hank's work load. • • Bob:begins transferring some of Hank's work to other. members. One day. when -.fiob, tells Hank he will no .longer have to prepare a certain report, Hank re- plies, "is there anything else I'm doing that ;you..don',t.likev . Bob had assumed Hank would know why he was trying to lighten his work load, and Hank had incorrectly inferred 28 / Popular Government :disagree with each other. It 1s often be- ag cause the same word means different pl things to them. For example imagine to that a group decides to make decisions pl by consensus. However. to some mem- ve bers consensus means general agreement. it while to others it means unanimous ag agreement The first time the group f m makes a decision that has general but lect not unanimous support. it will discover d that it had not agreed on the meaning dsi of consensus. 0 One way to determine whether all join group members are using a word it to mean the same thing is to ask them Oh the first time the word Is used. You facts might say something like "You used the diffe word consensus. To me consensus means exa unanimous agreement and not gen- ha eral agreement; is that what consen- coul sus means to your Notice that in de- some scribing whata word means to you. it By helps also'to describe whatit.does not mem mean; : • 13) Jointly design ways of t co testing disagreements and solutions imagine that the group is discussing whether the`. organization 'responds quickly enough to dtlzen complaints. Diane be- lieves that citizens are getting timel; responses, but Kate disagrees. Normal ly In disagreements like this. each pe son tries to convince the other that he or she Is wrong. Diane will offer all her evidence to support her position,. and Kate will do the same for her own posi- tion. Each may doubt the others evi- dence. and neither will offer evidence 10000 ❑BOO 0000 - cause r- sition likely views •ordet•f these contrib relevan LC:Gc i l J ,naxe ueusivns uy cun- 'I u!!_i� sensus. Making decisions by 'c0°;I consensus is the heart of these groundrules Consensus means that everyone in the group free- ly agrees with the decision and will sup- port it. If even one person cannot agree with a proposed decision. then the group does not have consensus. Consensus ensures that each mem- ber's choices will be free choices and that each will be internally committed to those choices. Consensus decisio making equalizes the distribution o power in the group because every mem- ber's concerns must be addressed and his or her support Is required in orde to reach a decision. For example, if a member needs to understand more about an issue the member can with- hold consent until he or she under- stands the issue Reaching consensus usually takes more time than voting be- cause it is hard work to find a derision or solution that everyone fully supports. But because people are internally com- mitted to them. in the long run dedsions made by consensus usually take less time to implement successfully and en- counter Tess resistance. When the group thinks it is about to reach consensus, one member should state the decision under consideration. and then each member should say whether he or she consents. This avoids the mistake of assuming that silence means consent. Voting is not allowed in consensus decision making, but the group can take straw polls to see whether it is dose to consensus and to see which members still have concerns about the proposed decision. To reach consensus. members must agree without feeling pressured by the group. Consensus should be used throughout the time a group Is solving a problem. not Just at the end when members are selecting the best alternative Each time that the group is about to move to the next step of the problem solving process. It should get consensus. Individuals are often reluctant to use this groundrule because in their ex- periences. groups rarely are able to reach consensus and because they fear that key decisions will not be made. However, the reason many groups are unable to reach consensus is because they do not have an effective set of groundrules: following the other groundrules in this article will increase n some way to systematically in- f corporate its successes and learn from its mistakes. Self - critiques provide a way to do this. This is how they work Before r the end of each meeting. the group asks itself three questions: (1) what ground- rules did we use welh (2) what ground- rules do we need to improve on? and (3) exactly what will we do differently next time? For the critique to be helpful. when • answering each of the questions, mem- bers must be very specific and give ex- amples (which itself is a groundrule). For example John might say. "1 think Debra helped the group focus on interests, not positions. when she asked Bob what in-• terests led him to oppose flexible work- ing hours. Do others agree ?" A general comment like "1 think we all could do a better job of staying focused" does not help the group identify exactly how the group lost its focus. Giving someone negative feedback can be difficult. but it is easier if you give it in a way that is consistent with the groundrules. such as making your state- ment and then inviting people to dis- agree with you. If members keep in mind that the purpose of the self - critique is to improve the group's per- formance. that also makes it easier to give negative feedback. One way to conduct effective self - critiques while redudng the amount of negative feedback that members must give each other is for each member to • identify groundrules that he or she has used well or poorly during the meeting. After each member has taken respon- sibility for assessing his or her own per- formance members can then give each • other feedback. Because self- critiques can be uncom- fortable and because groups are often pressed for time. sometimes groups do not conduct them. Ultimately. however, h the only way a group can systematical- ly improve its performance is to learn a Lne cnances tnat a group wm reacn con- sensus. Second. it is important to remember that these groundrules are most appropriate when the full group must support the decision in order for it to be implemented effectively. Under this condition. the alternative to reach- ing consensus is to make a decision that will not be effectively implemented. 16) Do self - critiques. For a group to become more effec- tive over tirne. it must have 0000 00000 000© it from its own experiences continually— by doing self- critiques. Putting the Croundrules to Use For these groundrules to be help, everyone in the group must understand them. agree on what they mean, and commit to using them. One way to achieve this is to ask members of the group to read this article, discuss it in the group, and then decide whether they want to use this set of groundrules. Because the groundrules are based on valid information and free and informed choicer group tnembers should agree to use these groundrules only after they have considered them carefully. Often 1 am asked whether it is possi- ble. to useonly a subset of these ground- rules.' Because each of the sixteen groundrules supports the others. remov- ing one reduces the degree to which the group will be able to maximize valid in- formation; free and informed choice. and internal commitment Nevertheless, it is probably 'more effective to use some of the groundrules than to use none Be- information is necessary not only for inte.rnai commitment and free and Informed choice but also for ear', of the. groundrules, groups seeking k use :a :.subset should, at a minimum. adopt those designed to maximize valid information. Although these groundrules are rele- vant fora wide range of groups, they are not exhaustive Some groups may find a need for additional groundrules to help them accomplish their particular tasks..: ,. Once the. group has agreed to use :these (orother) groundrules It must de- vefop'a:lWaji.to ensure their.use. This re- gi;(res•,that,.the :fist of groundrules be ;.vlsible.to:meinberswhen they are meet- ing as a'group. A poster -size list can be .hting.up In the group's meeting room'br- each member.can receive a pocket -size list Whatever the method, members should,agree to refer to the groundrules during the meeting when they are try- frig to use them. For example one mem- ber might say. "Beth, 1 want to test out an inference' 1 made from your state - ment,'.or "'tire, what is your interest be- Ind .. that position ?" By explicitly referring to the groundrules, members. re better able to evaluate how well' Spring 1989 / 29 end of each meeting, the group should do a self - critique (which 1 have described above). This will help the members identify how well they have used the groundrules and where they need to improve. Getting members to use the sixteen groundrules consistently is a difficult task. It will take numerous meetings be- fore members develop the skills re- quired by the groundrules. Old groups that have worked together before without using these groundrules may al- ready have an implicit set of ineffective groundrules that conflicts with the new ones. In this case the group may have to identify its Implicit, ineffective groundrules and agree to replace them with the new set. Ultimately, the more the group openly discusses how they are using the groundrules the sooner Its effectiveness can Increase Using these groundrules may require taking risks. to the extent that members of the group distrust one another. Spe- cifically. members will have to risk shar- ing information that they fear may be used against them. To reduce (but not eliminate) this risk. group members - espedally superiors in the group -can agree not to do so. In addition, the group also can decide that If a member 'believes he or she has had information used against him or her. that issue can be dlsaissed in the group. To build trust, ultimately members must be willing to take these risks + 1. Chris Argyris an Increasing Professional T8� o JossPractice Bast. 19711, ado l� 2. Argyrls and Sch tie 3. Groundruks I. 3. 13 are based on Chris Argyris. Rrrran! (San Fran- dsoo: lossey -Bass I9 • a. This graadn le isher and Wil- iam Ury. Getting to Its Book% 19821. 5. In some cases of these one or more and other rules the k that the rules slue For example some s elected bod- ies) vovr bylaws that be made by g which the groups gy exclusive with consensus to read) consensus even if. ultimately. decide by a Notes d D A. Schart. E(ledi►rness (San F in. Theory la Pn 8.10.11.andl cal. L.armb, acid Adios 821. based on Roger Ro (New lbtic P�engtrin people event to omit because they then group follows are mutually groups Isudt a require dedstons to ps consider mutes Ho+wxer groups an attempt mately, they must Offprints of this article are available for sale. For more information. contact the Publications Office Institute of Govern- ment, CBO 3330 Knapp Building. UNC- CH. Chapel Hill. NC 275993330. 30 / Popular Government Handout 2 2010 Planning Session Department Head Meeting January 5, 2010 Human Resources Rank Topic Score 1 COLA 74 2 401 k and Dental Reinstatement (No Tax Increase) 51 3 MAPStudy 40 4 Retirement $400k plus $147k (No Tax Increase) 35 5 Personnel Ordinance Review 34 6 Return to Work Program 21 7 Employee Assistance Program 20 8 Wellness 15 9 Affirmative Action Tracking 11 10 Shared Leave 10 Bench Marking Rank Topic Score 1 Johnston County 9 2 Union County 6 3 Onslow County 2 4 Nash County 0 Legislative /Regulation Rank Topic Score 1 Secondary Roads 25 2 Unions 17 3 2010 Census 13 4 Air Quality /Non Attainment 11 5 Drought Legislation 10 6 Register of Deeds - SS# Redaction 7 7 Board of Elections /Electronic Poll Booths 5 8 New Medicaid Program D 4 Ongoing Projects Rank Topic Score 1 UDO 33 2 Storm Water 31 3 Farmland Preservation 30 4 CIP /Schools 29 5 Fire Tax Realignment 19 6 Benhaven /County Wide Paramedics 18 7 Emergency Services to Old Law Enforcement Bldg 16 8 Dental Clinic 14 9 DSS Child Support Transition 13 10 Board of Elections Realignment 12 10 Airport Overlay 12 11 Business Operation Cont Plan 11 12 Hazard Mitigation Plan Update 9 13 BBQ Creek Park 5 To Topics Rank Customer Category Rank Topic Score 1 Information 34 2 Credit Card /Banking Services 17 3 Permit Process - Continued Improvement 16 4 Incetive Revamp 14 To Topics Rank New Initiatives Category Rank Topic Score 1 Technology 40 2 Recycling Convenience Center 37 3 Website Update 30 4 Power Usage /Lighting 9 5 Cell Phone Contracts 8 6 Procurement of Office Equipment 7 7 EMS Subscriptions 4 To Topics Rank Collaborative Category Rank Topic Score 1 Schools 42 2 HFTC Allied H/West Park 24 3 Library 19 4 HHS 18 5 Campbell 16 6 Probation 12 7 1st Choice 11 8 Mental Health 2 To Topics Rank Topic Category Score 1 COLA Human Resources 74 2 Schools Collaborative 42 3 Technology New Initiatives 40 4 Information Customer 34 5 UDO Ongoing Projects 33 6 Secondary Roads Legislative /Regulation 25 7 Johnston County Bench Marking 9 Handout 3 2010 Planning Session Our isiOn: Sampson County is an inviting community renowned for its rich agricultural heritage, abundant natural resources, economic prosperity and unparalleled quality of life. u1 Mission! 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A critical part of this learning curve involves financial management, in localities where elected officials possess the ultimate responsibility for the fiscal matters of their organizations.' To carry out this responsibility, the law requires an annual independent audit of the financial statements and requires that the auditor be selected by and report directly to the governing board.' One goal of this process is for the locality to receive an "unqualified audit opinion," meaning that its financial statements were prepared in conformity with generally accepted accounting principles (GAAP) and present, in all material respects, the financial position of the organization. Another goal, which may be overlooked by elected officials, is to analyze and interpret the financial statements to determine the financial condition of the local government. Administrators play an extremely important role in helping elected offi- cials manage the fiscal matters of local governments. They ensure that profes- sional management practices are used to budget and account for the financial resources of the organization, they pre- pare monthly financial reports for elected officials to review budget -to- Rivenbark is a School of Government faculty member specializing in local government administration. Roenigk is the director of the North Carolina Benchmarking Pro- ject. Allison is a School faculty member specializing in governmental accounting and financial reporting. Contact them at rivenbark @sog.unc.edu, roenigk @sog .unc.edu, and allison@sog.unc.edu. 4 POPULAR GOVERNMENT actual variances, and they ensure that annual financial statements are pre- pared in conformity with GAAP. In 1999, as part of their role, they were responsible for implementing Govern- mental Accounting Standards Board (GASB) Statement No. 34, Basic Finan- cial Statements —and Management's Discussion and Analysis —for State and Local Governments. This pronounce- ment expanded the financial reporting model for local governments to include government -wide and fund statements. One reason for expanding the model was to provide a more complete picture of financial position.3 Another reason was to increase a local government's ability to compare itself financially with other local governments and thus to help readers of financial statements evaluate the financial condition of local governments through benchmarking.4 GASB Statement No. 34 now has been fully implemented in North Caro- Tina local governments, so the natural next step for administrators is to take advantage of the expanded model of financial reporting and provide elected officials with more robust information on the financial condition of their local governments. The purpose of this article is to present administrators with an ap- proach for analyzing, interpreting, and communicating financial condition to elected officials. First, we define financial condition, responding to the lack of agreement on this concept in our profes- sion.' Next, we present the criteria that we identified for creating our approach to evaluating financial condition. Then we describe how the approach relates to the expanded model of financial report- ing, the dimensions and the indicators that we selected to measure financial condition, and the "dashboard," or the gauges, that are needed to communicate financial condition to elected officials in a written, numerical, and visual format. Defining Financial Condition The definitions of financial condition in the professional literature are either specific in nature or broad in scope.6 Therefore, in search of middle ground, we turned to the work of Robert Berne and Richard Schramm to guide our approach for evaluating financial condition.' These scholars maintain that there are two basic reasons for how resources are presented in financial statements: to report on the flow of resources during a given period and to report on the stock of resources at a given point. Operating statements report on the inflow and the outflow of financial resources during the fiscal year. Balance sheets report on the stock of assets, liabilities, and net assets or fund balances at the end of the fiscal year. We concluded that a logical definition of financial condition would align with resource flow and stock as reported in annual financial statements. Berne offers a definition of financial condition that is closely related to the concept of resource flow and stock: the probability that a government will meet, currently and in the future, its financial obligations to creditors, consumers, em- ployees, taxpayers, suppliers, constitu- ents, and others as they become due, and its service obligations to constituents .8 The probability that a local government can meet these obligations, as interpreted from financial statements, increases with adequate resource flow to meet current obligations and with adequate resource stock to meet obligations over time. An implied but missing element of Berne's definition is provision of capital assets. In response to this and other considerations, we offer the following definition of financial condition: a local government's ability to meet its ongoing financial, service, and capital obligations based on the status of resource flow and stock as interpreted from annual finan- cial statements. Although a local government's ability to meet its ongoing financial, service, and capital obligations is broad in scope, the specific component of our definition is how a local government's ability to meet them aligns with resource flow and stock as interpreted from annual financial statements. Another important aspect of our definition is that it focuses solely on financial condition. One of the most frequently cited definitions of financial condition comes from the International City /County Management Association (ICMA): a government's ability to fi- nance its services on a continuing basis.' This definition aligns with financial factors that show financial condition and with economic factors that affect financial condition. However, this align- ment represents a different form of analysis and requires data from sources outside annual financial statements.10 Criteria for Creating an Approach to Evaluating Financial Condition Similar to the situation with defining financial condition, our profession does not have an agreed -on approach for analyzing, interpreting, and communi- cating financial condition in local gov- ernment. And again, the approaches that exist are either specific in nature or broad in scope. As an integral part of the development of our model, we re- viewed and analyzed approaches con- tained in the literature. Ken Brown created the 10 -point test (which was updated in response to GASB Statement No. 34) as an easy -to -use approach to evaluate the financial condition of a local government." An advantage of the 10 -point test is the use of benchmark data for interpreting each financial in- dicator. A disadvantage is the limited analysis across all major funds. The ICMAs model, on the other hand, provides a comprehensive approach to evaluating the financial condition of a local government, similar to bond - rating agencies' approach to evaluating a local government's ability to manage systematic and unsystematic risk in the repayment of debt over time.' -' The dis- advantage of this approach is the sheer number of indicators used to analyze both financial and economic factors of financial condition, making it a feasible tool for larger local governments only. Because of the broad continuum of current methods for evaluating financial condition in local government, we started with the following criteria to guide our approach: systematicness, comprehen- siveness, flexibility, comparability, and manageability. We based the criteria on a literature review and our own professional backgrounds. Designing a systematic approach to evaluating financial condition was para- mount, given the expanded financial - reporting model created by GASB Statement No. 34. More specifically, the approach had to systematically evaluate the financial condition of the organization as a whole as reported in government -wide statements, and systematically evaluate the financial condition of each major fund. The approach also had to be com- prehensive, providing a thorough analy- sis of resource flow and stock at the government -wide and fund levels of the organization. The focus on resource flow and stock supported our definition of financial condition. The criterion of flexibility acknowl- edged that administrators might want to augment our approach with additional financial indicators or even replace a financial indicator that we had selected with another. We have used the quick ratio to analyze the liquidity of a Local government, for example, whereas others support the use of the current ratio." Although we relied on the most prevalent indicators in the literature, individual circumstances might warrant change. Comparability was one of the primary reasons for the passage of GASB State- ment No. 34. Calculating a financial indicator like the quick ratio at one point would provide only limited information. Calculating it over time for trend analysis and benchmarking it against other local governments would provide the neces- sary context for interpreting the results. The reality is that evaluating financial condition is relative, requiring com- parative information for analyzing, interpreting, and communicating it to elected officials. Evaluating financial condition also had to be manageable, unlike the ICMAs model. Local governments of all sizes had to be able to implement it accurately from financial data taken from their an- nual financial statements — consistent with our definition of financial condition — and had to have the organizational re- sources to manage it over time. Another important aspect of this criterion was the ability to use our approach success- FALL 2009 5 fully to communicate financial condition to elected officials. Doing so would re- quire a careful balance of financial indi- cators selected for the evaluation. If the approach relied on a limited number of financial indicators, then communicating a comprehensive analysis to elected officials would not be possible. If the approach relied on too many financial indicators, then communicating the analysis would be unwieldy. Understanding the Financial Reporting Model Because our approach is designed to be systematic across the government -wide and fund statements, to use it, elected officials must possess some under- standing of the model of financial reporting used in local government (for the model in which our approach is applied, see Figure 1). Elected officials must have a basic understanding of three important aspects of this model before they can be expected to use financial condition information effectively. First, financial statements in local govern- ment have two levels of reporting, the government -wide level and the fund Figure 1. Revised Financial- Reporting Model for Analysis of Financial Condition Primary Government Government -Wide Level Fund Level Governmental Activities (Economic Resources) Business -Type Activities (Economic Resources) level. Second, financial statements for government -wide activities and enter- prise funds measure economic resources using the accrual basis of accounting, whereas financial statements for gov- ernmental funds measure financial resources using the modified accrual basis of accounting.14 Third, all North Carolina counties and municipalities are required to have a general fund, which is the main operating fund and one of several potential governmental funds. However, not all local governments have enterprise funds, which are used to account for the resource flow and stock of utilities (for example, water, waste- water, electricity, and natural gas). Two important resources for under- standing the aspects of the financial reporting model in local government Enterprise Funds (Economic Resources) appear in previous issues of Popular Government: "How to Read Govern- mental Financial Statements, Part 1," by Gregory S. Allison, which explains the fund structure of governmental accounting; and "How to Read Governmental Financial Statements, Part 2," also by Allison, which explains the financial statements for govern- mental activities and business -type activities prepared at the government - wide level.' The purpose of those articles is not to make elected officials experts in governmental accounting. It is to provide them with basic informa- tion on reading financial statements, which will be extremely useful in com- municating financial condition to them. In other words, they need enough information to ask questions about the Table 1. Resource Flow for Government -Wide Activities and Enterprise Funds (Focusing on Economic Resources and Accounted for on an Accrual Basis) Financial Dimension Description Financial Indicator lnterperiod Equity Addresses whether government Total margin ratio lived within its financial means during fiscal year Financial Performance Self- Sufficiency Financing Obligation Addresses extent to which govern- ment's financial position improved or deteriorated as result of resource flow Addresses extent to which service charges covered total expenses Addresses service flexibility, or amount of total expenses committed to annual debt service Percentage change in net assets Charge -to- expense ratio Debt service ratio Government -Wide Calculation Total resource inflow' ((program revenues plus total general revenues and net transfers) divided by total resource outflow (total expenses) Change in net assets divided by net assets, beginning Charges for services (fees„. fines, and charges for services) divided by total expenses2 Debt service (principal and interest payments on long -term debt) divided by total expenses plus principal4 1. Trend and benchmark data are needed for a more robust interpretation of each financial indicator. 2. Depending on how self - sufficiency is defined for government -wide activities, some local governments may choose to use total program revenues rather than charges for services as the numerator. 3. Self- sufficiency may be defined as below 1.0 for selected enterprise funds, responding to state law and local policy. 4. Principal is added to the denominator because it is not included in expenses. 6 POPULAR GOVERNMENT financial position and condition of the local government. Figure 1 does not contain fiduciary funds because the resources accounted for in pension trust, investment trust, private - purpose trust, and agency funds are owned by parties other than the local government. Figure 1 also does not contain inter- nal service funds, one of the two types of proprietary funds (the other type being enterprise funds) because they inherently create redundancy in finan- cial reporting.' To overcome this prob- lem, the accumulated resources of these funds are disbursed back to either gov- ernmental activities or business -type activities at the end of the fiscal year on the basis of which group of activities used them the most. The profits or the losses of these funds then are divided between governmental activities and business -type activities on the basis of actual use. We acknowledge that local governments may want to use our ap- proach to evaluate the financial con- dition of selected internal service funds on a case -by -case basis. Internal service funds that account for activities like fleet services may be appropriate for this form of analysis. An actuarial analysis Activities Data Source Statement of activities Statement of activities Statemen of activities Statement of activities5 may be more appropriate for internal service funds that account for activities like health benefits, given the known and unknown risks involved with them. Selecting Financial Dimensions and Indicators Fortunately the literature contains a large number of financial dimensions and indicators to choose from in eval- uating financial condition." Our task was to pare them down so that our approach would result in a comprehensive financial evaluation, but be manageable for local governments of all sizes in North Carolina. To begin selection, we used our definition of financial condition, which focuses on the status of resource flow and stock as interpreted from annual financial statements. We then identified fundamental financial dimensions that support the analysis of resource flow and stock. Our intent was to identify one set of flow indicators and one set of stock indicators for evaluating the financial dimensions that we selected. Doing so was not possible, however, given that certain financial statements measure economic resources, whereas other statements measure financial resources. We responded by selecting one set of flow and stock indicators for evaluating the financial condition of government -wide activities and enterprise funds, given that their financial statements measure economic resources. We then selected another set of flow and stock indicators for evaluating the financial condition of governmental funds, given that their financial statements measure financial resources. Although some overlap exists between the two sets of flow and stock indicators, there are some fundamental differences between them because of the accounting differences.18 Enterprise Funds Calculation Total resource inflow (operating and nonoperating revenues plus transfers in) divided by total resource outflow (operating and nonoperating expense plus transfers out) Data Source ement of revenues expenses . changes in fund net assets Evaluating the Financial Condition of Government -Wide Activities and Enterprise Funds We selected four financial dimensions and four financial indicators for eval- Interpretation) Ratio of 11.0 or higher indicates that government lived within its financial means Change in net assets divided by net assets, beginning Charges for services divided by operating and nonoperating expenses Statement of revenues, expenses, and changes in fund net assets Positive percentage change indicates that government's financial position improved. Debt service (principal and interest payments on long -term debt) divided by operating and nonoperating expenses plus principals Statement of revenues, expenses and changes in fund net assets Statement of revenues, expenses, and changes in fund net assets' Ratio of 1.0 or higher indicates that service is self- supporting.3 Service flexibility decreases as more resources are committed to annual debt service. 5. Principal and interest payments on long -term debt for governmental activities are located on the statement of revenues, expenditures, and changes in fund balances. Principal payments on long -term debt for business -type activities are located in the notes to financial statements. Interest payments on long -term debt for business -type activities are located on the statement of revenues, expenses, and changes in fund net assets. 6. Principal is added to the denominator because it is not included in expenses. 7. Principal payments on long -term debt for enterprise funds are located in the notes to financial statements. Interest payments on long -term debt for enterprise funds are located on the statement of revenues, expenses, and changes in fund net assets. FALL 2009 7 uating resource flow for government - wide activities and enterprise funds (see Table 1). The first dimension, inter - period equity, addresses whether a government lived within its means during the fiscal year.19 The total margin ratio is used to evaluate this dimension. It represents the total inflow of re- sources divided by the total outflow of resources for government -wide activities and for enterprise funds. A ratio of 1.0 or higher indicates that the government lived within its means for the respective activity or fund. For government -wide activities, resource inflow includes the net of transfers in and out between governmental activities and business -type activities. For the enterprise funds, transfers in from other funds are included as resource inflow, and transfers out to other funds are included as resource outflow. These assumptions are consistent with the GAAP reporting format. Whereas the total margin ratio analyzes the relationship between total resources available and total resources consumed, the financial indicator of percentage change in net assets used to evaluate our second financial dimen- sion, financial performance, provides feedback on the extent to which a government's net assets improved or deteriorated as a result of resource flow.'° A positive percentage change indicates that a government's financial position improved from the resource flow that occurred during the fiscal year. Periodic modest fluctuations are generally to be expected. Fluctuations that are significant in nature (in either direction) should be obvious and evaluated accordingly. The financial dimension of self - sufficiency addresses the extent to which the government used service charges to cover total expenses. This dimension is especially important to business -type activities and to enterprise funds, for which the goal often is to cover total expenses on a charge- for - service basis. The charge -to- expense ratio is used to analyze this dimension. A ratio of 1.0 or higher indicates that the activity or the fund was self- sufficient. An argument could be made that this financial dimension is not applicable for governmental activities because govern- mental services with public -good char- acteristics are not designed to be self - supporting. However, elected officials and administrators often are interested in the mix between general taxation and user -fee revenue when preparing and adopting budgets for the forthcoming fiscal year. To this end, the financial - indicator calculation does not include grants and contributions, which are an inherent part of program revenues in the government -wide financial statements. Our final dimension for resource flow for government -wide activities and enterprise funds is financing obligation. This dimension is analyzed with the debt service ratio, which is calculated by dividing annual debt service of principal and interest payments by total expenses plus principal. Because of their measure - ment focus, both government -wide activities and enterprise funds do not report principal repayments on debt as an expense. To achieve a proper calcu- lation of this debt service ratio, the principal amounts must he included in both the numerator and the denomina- tor. The purpose of this ratio is to provide feedback on service flexibility, which decreases as more resources are committed to annual debt service. We selected four financial dimensions and four financial indicators for eval- uating resource stock for government - wide activities and enterprise funds (see Table 2). An advantage of the stock indicators over the flow indicators is that they tend to be more recognizable in the profession because they are asso- ciated with the balance sheet, which more often is used to evaluate financial condition in the public and private sectors. In other words, balance sheets report on equity, or net position, at a given point. Liquidity is the financial dimension used to analyze an organization's ability Table 2. Resource Stock for Government -Wide Activities and Enterprise Funds (Focusing on Economic Resources and Accounted for on an Accrual Basis) Financial Dimension Liquidity Solvency Description Government -Wide Financial Indicator Addresses government's ability to Quick ratio meet short -term obligations Addresses government's ability to meet long -term obligations Net assets ratio Calculation Cash and investments divided by current liabilities (not including deferred revenue) Unrestricted net assets divided by total liabilitiess Leverage Capital Addresses extent to which total assets Debt are financed with longterm debt o- assets ratio Long -term debt divided by total assets Addresses condition of capital assets as defined by remaining useful life condition ratio 1.0 – (accumulated depreciation divided by capital assets being depreciated) 1. Trend and benchmark data are needed for a more robust interpretation of each financial indicator. 2. Deferred revenues are located either on the statement of net assets or in the notes to financial statements. 3. The Local Government Commission uses a different ratio for calculating the quick ratio for enterprise funds: current assets (less inventory and prepaid expenses) divided by current liabilities. 4. Deferred revenues are located either on the statement of net assets — proprietary funds, or in the notes to financial statements. 8 POPULAR GOVERNMENT to meet short -term obligations. It is cal- culated with the quick ratio: cash and investments divided by current liabil- ities. A high ratio suggests that the government is more likely to meet its short -term obligations. Solvency; on the other hand, is the financial dimension used to analyze an organization's ability to meet long -term obligations. It is calcu- lated with the net as- sets ratio: unrestricted net assets divided by total liabilities. As with the quick ratio, a high ratio suggests that the govern- ment is more likely to meet long -terns obligations. Some advocate using total assets as the denominator for this calculation rather than total liabilities.'' We believe that standardizing unrestricted net assets with total liabilities provides a stronger indication of an organization's ability to meet long -term obligations. Furthermore, we believe that restricted net assets should not be a part of this equation because such assets are typically not directly related to an entity's ability to meet current or long -term obligations. Leverage is the financial dimension that addresses the extent to which total assets are financed with long -term debt. The financial indicator used to analyze this dimension is debt -to- assets ratio: long -term debt divided by total assets. If a government becomes too reliant on debt financing to secure capital assets, it may compromise service flexibility as it commits more resource flow to annual debt - service obligations. An overreliance on debt also may have unfavorable implications for bond ratings. This financial indi- cator may present chal- lenges for North Carolina counties because school debt is included on their financial statements and the value of school in- frastructure financed with that debt is not. One approach to getting around this problem is to use the flexibility criterion, eliminating or replacing the debt -to -asset ratio. The preferred approach is to calculate the indicator on the basis of the data contained in the financial statements, footnoting the discrepancy for the reader.'' -- The reality is that counties are responsible for school debt but do not own the related infrastructure. Capital, the final financial dimension of resource stock for government -wide activities and enterprise funds, is used to analyze the condition of capital assets as defined by their remaining useful life. The financial indicator to measure this dimension is capital- assets condition ratio. The data used for this calculation are located in the capital assets section Activities Data Source Statement of net assets2 Statement of net assets ement of net assets Notes to financial statements Enterprise Funds of the notes to financial statements. To calculate the indicator, accumulated depreciation is first divided by capital assets subject to depreciation. The re- sulting percentage is then subtracted from 1.0, which results in the remaining useful life of the total capital assets being depreciated. A high ratio suggests that a government is investing in its capital assets. Evaluating the Financial Condition of Governmental Funds We selected three financial dimensions and three financial indicators for eval- uating resource flow for governmental funds (see Table 3). This evaluation applies primarily to the general fund. At times a local government may want to analyze the financial condition of special revenue funds, debt service funds, capital project funds, or permanent funds. Our indicators may be used to evaluate the financial condition of these funds. However, we propose that they be captured as part of governmental activities unless a local government has a specific reason for disaggregating them. For example, a local government may have a major special revenue fund that it wants to disaggregate, given the amount of resources involved or the importance of services and activities being accounted for in the fund. Service obligation is the first financial dimension for evaluating the resource flow for governmental funds. The Calculation Cash and investments divided by current liabilities (not including deferred revenue)3 Data Source tatement of net assets — proprietary funds4 Interpretation) High ratio suggests that govern - ment is able to meet short -term obligations. Unrestricted net assets divided by total liabilities ong-term debt divided by total assets 1.0 – (accumulated depreciation divided by capital assets being depreciated) Statement of net assets — proprietary funds Statement of net assets — proprietary funds Notes to financial statements High ratio suggests that govern- ment is able to meet long -term obligations. High ratio suggests that govern- ment is overly reliant on debt for financing assets. High ratio suggests that govern- ment is investing in capital assets. 5. The value of unrestricted net assets for governmental activities often is negative for North Carolina counties because the value of school assets financed with county debt is not included on the statement of net assets. Although the interpretation of the financial indicator remains the same, the fact that these assets are not included should be footnoted for explanation. FALL 2009 9 Table 3, Resource Flow for Governmental Funds (Focusing on Financial Resources and Accounted for on a Modified Accrual Basis) Financial Dimension Service Obligation Description Addresses whether government's annual revenues were sufficient to pay for annual operations Financial Indicator Dependency Financing obligation Addresses extent to which government relies on other govern- ments for resources Addresses service flexibility, or amount of expenditures com- mitted to annual debt service Calculation Total revenues divided by total expenditures (plus transfers to debt service fund and less proceeds from capital leases and installment purchases) Data Source Statement of reve- nues, expenditures, and changes in fund balances Interpretationl Ratio of 1.0 or higher indicates that govern -' ment lived within annual revenues. Intergovernmental Total intergovernmental revenue divided by total revenue ratio Debt service (principal and interest payments on long -term debt, inclu- ding transfers to debt service fund) divided by total expenditures plus transfers to debt service fund2 Statement of reve- nues, expenditures, and changes in fund balances Statement of reve- nues, expenditures, and changes in fund balances High ratio may indicate that government is too reliant on other governments. Service flexibility de- creases as more expenditures are com- mitted to annual debt services. 1. Trend and benchmark data are needed for a more robust interpretation of each financial indicator. 2. Debt service may be part of expenditures, a transfer to the debt service fund, or both. operations ratio, representing total revenues divided by total expenditures, is used to analyze this dimension. The data for this calculation come directly from the statement of revenues, expen- ditures, and changes in fund balances, and a ratio of 1.0 or higher indicates that a government lived within its means. Transfers out are not part of this calculation unless the transfer is to a debt service fund. Also, GAAP require governmental funds to report the present value of the minimum payments on a capital lease or installment purchases as an expenditure in the year of the agree- ment's inception. If the total expendi- tures do include this amount (as would be evidenced by another financing source of an equal amount), they should not be included for purposes of this calculation and should be subtracted from total expenditures. The remaining two dimensions capture important aspects of revenues and expenditures. Dependency is used to determine the extent to which gov- ernments rely on other governments for resources, as measured by the inter- governmental ratio: intergovernmental revenue divided by total revenue. Fi- nancing obligation is used to provide feedback on service flexibility by measuring, with the debt service ratio, the amount of resources committed to ro POPULAR GOVERNMENT annual debt obligations. If transfers to a debt service fund have been made by the governmental fund, the transfer should be included in both the numerator and the denominator. We selected three financial dimen- sions and three financial indicators for evaluating resource stock for govern- mental funds (see Table 4). The financial dimension of liquidity uses the quick ra- tio, which follows the same philosophy and calculation as the liquidity dimen- sion for government -wide activities and enterprise funds. The financial dimension of solvency is evaluated with one of the most recog- nized financial indicators in local gov- ernment: fund balance as a percentage of expenditures, as calculated with available fund balance divided by total expenditures plus transfers out.23 Trans- fers out is included in the denominator because the Local Government Com- mission standardizes available fund balance for comparison purposes by dividing it by expenditures and transfers out less the present value of any capital leases or installment purchases entered into during the fiscal year.24 The final financial dimension for eval- uating resource stock for governmental funds is leverage, which is supported with the financial indicator of debt as a percentage of assessed value. The defi- nition of "debt" is tax - supported, long- term debt, which is the amount prepared for a local government's sworn state- ment of debt.2s The debt is standardized by dividing it by assessed value. State law prevents local governments from is- suing debt that would result in net debt exceeding 8 percent of assessed value.26 This financial indicator also plays a ma- jor role with bond- rating agencies when they are conducting a general - obligation rating assignment.27 Using a Dashboard to Communicate Financial Condition Communicating with dashboards is be- coming more common in local govern- ment.28 One possible reason is people's ability to create them with common software packages like Excel. Another possible reason is our understanding that most people are visual learners. Dashboards capitalize on this reality by communicating critical information in a visual format. We selected the dash- board because it supports our approach of communicating financial condition in a written, numerical, and visual format, including a comparative analysis for a more robust interpretation of each financial indicator. We created a four -page dashboard for communicating the financial condition of local governments to elected officials (for an excerpt, see Figure 2). 29 Page 1, the cover of the dashboard, contains the written interpretation of the analysis, which includes an overview of funds, an interpretation of the financial dimensions and indicators, a discussion of policy implications, and a summary of financial condition. The overview of funds is optional, given that this information also is contained in the notes to the financial statements. The discussion of policy implications also is optional, given that some administra- tors may want elected officials to draw their own conclusions about how the local government's financial condition affects organizational policy. The interpretation of the financial dimensions and indicators should be completed with a written analysis of selected results. In other words, the focus is on the financial strengths and weaknesses of the organization. Trying to provide written information on each financial indicator would not reconcile with our criterion of manageability. In the previous section, we presented the first aspect of manageability: that local governments of all sizes in North Carolina should be able to implement our approach. Another aspect is that information should be presented in a manageable way for interpreting the results and making decisions. There- fore, the interpretation of this section should focus on outliers, important trends, and key comparisons with the benchmark group. The summary of financial condition is used to communicate to elected of- ficials the overall financial condition with aggregate conclusions. For exam- ple: "The financial condition of Capital City is relatively strong on the basis of liquidity and leverage.30 Capital City also has improved its ability to live within its means over the past five years." Although elected officials may want concluding statements like "Capital City's financial condition is strong," adminis- trators understand that evaluating the financial condition of any organization, public or private, involves a subjective element that often prevents matter -of- fact conclusions. The remaining pages of the dashboard, shown in the background in Figure 2, contain the financial indicators that we selected to evaluate the financial condition of local governments. They are presented in a manner consistent with our approach to communicating financial condition to elected officials. Adhering to the criterion of systematicness, we have displayed the financial indicators for the governmental activities on page 2 and the financial indicators for the major funds of the local government on pages 3 -4. Adher- ing to the criterion of comprehensive - ness, we have aligned the financial di- mensions with the financial indicators that support the analysis of resource flow and stock for Capital City's gov- ernmental activities, enterprise fund (water and sewer), and general fund.31 The criterion of comparability was the primary driver for the dashboard's design. The results of the financial indicators are based on the most recent fiscal year, plus four years of historical data. The charts take advantage of trend analysis, placing each indicator in the context of change over time. The results of the financial indicators are then evaluated against averages that are calculated from the benchmark group, adding another comparative dimension.32 An issue in local government is selecting appropriate benchmark partners. We support two approaches for making this selection. One is to select local governments of a similar population size. Another is to select local governments that offer similar services, paying close attention to those that operate the same type of utility systems. This approach follows the strategy used by the Local Government Tablk, 4. Resource Stock for Governmental Funds (Focusing on Financial Resources and Accounted for on a Modified Accrual Basis) Financial Dimension Description Financial Indicator Calculation Liquidity Addresses govern- Quick ratio ment's ability to meet short -term obligations Cash and investments divided by current liabilities not including deferred revenue) Solvency Leverage Addresses govern- ment's ability to meet long -term obligations Addresses extent to which government relies on tax - supported debt Fund balance as percentage of expenditures Debt as percentage of assessed value Data Source Balance sheet2 Interpretation) High ratio suggests that government can meet short -term obligations. Available fund balance divided by total expenditures (less proceeds from capital leases) plus transfers out3 Tax-supported, long- term debt divided by assessed value4 Balance sheet Notes to financial statements High ratio suggests that government can meet long -term obligations. High ratio suggests that government is overly reliant on debt. 1. Trend and benchmark data are needed for a more robust interpretation of each financial indicator. 2. Deferred revenues are located either on the balance sheet of governmental funds or in the notes to financial statements. 3. G.S. 159 -8 defines "available fund balance for appropriation" as the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts. 4. This calculation follows the requirement of G.S. 159 -55 that the net debt of the unit not exceed 8 percent of assessed valuation. FALL 2009 II key' C. Figure 2. Excerpt from a Dashboard for a Hypothetical City Capital City Evaluation of Financial Condition June 30, 2008 Assessment of Financial Condition at the Government -Wide Level car Bu„mma k r+ap —. Gpeunmmbl ACWioes AeaowFe FIpW Assessment of Financial Condition for the General Fund keY Capital CayS Benchmark Greer° Assessment of Financial Condition for the Enterprise Fund Ke, Capra on-Mora G Aawi2 meooy, .,rt, . Leverage Assessment of Financial Condition at the Government -Wide Level Key: Capital Cityl Benchmark Group Governmental Activities ft MOVE;:,:. Interperiod Equity 1.30 1.20 1.10 1.00 0.90 0.80 2003 2004 2005 2006 2007 Capital City = 1.10, Benchmark = 1.02 Interperiod equity measures whether a local government lived within its financial means. The total margin ratio is calculated as total financial resources divided by total financial obligations. Commission to report on fund balance as a percentage of expenditures for cities that operate electric utilities and cities that do not. When data from other local governments are not used for establishing benchmarks, profes- sional standards and internal policies may be used for establishing them. We explain how the dashboard is designed because it is not simply a collection of financial indicators. It is specifically designed to increase the ability to communicate financial condition effectively to elected officials in local government. It also is designed to support our definition of financial condition and the financial dimensions that we have selected to analyze resource flow and stock in annual financial statements. I2 POPULAR GOVERNMENT Summary Local officials, both elected and non- elected, may never reach a consensus on a professionally accepted set of financial indicators for evaluating the financial condition of local governments. Although there are pros and cons associated with any individual financial indicator (or any set of indicators), our focus is on providing administrators with an effec- tive approach for analyzing, interpre- ting, and communicating financial condition to elected officials. We have offered the following definition of financial condition to guide our ap- proach: a local government's ability to meet its ongoing financial, service, and capital obligations based on the status of resource flow and stock as inter- preted from annual financial statements. We then selected financial dimensions and indicators that supported the analy- sis of resource flow and stock as shown on the numerous operating statements and balance sheets contained in annual financial statements. Unlike previous models for evalua- ting the financial condition of local governments, our approach recognizes that financial reporting contains government -wide and fund statements and that some financial statements measure economic resources while others measure financial resources. This recognition provides a more sys- tematic and comprehensive approach to evaluating financial condition, re- sponding to the complexities of local government financial statements. We also capitalize on the strengths of a dashboard for communicating finan- cial condition to elected officials, using trend and benchmark data for a more robust interpretation of each financial indicator. Historically, more attention has been placed on financial position in local government than on financial condition. With the implementation of GASB Statement No. 34, an opportunity has been created to shift the focus to finan- cial position and condition in local gov- ernment. This represents the ultimate goal of our approach: to give adminis- trators a management tool that facili- tates their including financial condition when they are helping elected officials embrace the responsibility of managing the fiscal matters of local governments. Notes 1. For a complete definition of financial management, see Jerome B. McKinney, Effective Financial Management in Public and Nonprofit Agencies (3d ed. Westport, CT: Praeger, 2004). G.S. 160A -67 states that the government and the general man- agement of the city shall be invested in the council. G.S. 153A -101 is even more specific, stating that the board of commis- sioners shall exercise the responsibility of developing and directing the fiscal policy of county government. 2. See G.S. 159- 34(a). 3. Dean Michael Mead, An Analyst's Guide to Government Financial Statements (Norwalk, CT: Governmental Accounting Standards Board, 2001). 4. Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements -and Management's Discussion and Analysis -for State and Local Govern- ments (Norwalk, CT: Governmental Ac- counting Standards Board, 1999). Although GASB Statement No. 34 applies to both state and local governments, this article focuses solely on local governments. 5. Xiaohu Wang, Lynda Dennis, and Yuan Sen (Jeff) Tu, "Measuring Financial Condition: A Study of U.S. States," Public Budgeting 6 Finance 27, no. 2: 1 -21 (2007). 6. Ibid. 7. Robert Berne and Richard Schramm, The Financial Analysis of Governments (Englewood Cliffs, NJ: Prentice Hall, 1986). 8. Robert Berne, "Measuring and Re- porting Financial Condition," in Handbook of Public Administration, ed. James L. Perry (2d ed. San Francisco: Jossey -Bass, 1996), 66 -96. 9. International City /County Manage- ment Association, Evaluating Financial Con- dition (4th ed. Washington, DC: Interna- tional City /County Management Associa- tion, 2003). 10. A financial factor that shows financial condition is fund balance as a percentage of expenditures. An economic factor that affects financial condition is the annual growth rate of the assessed value of the community's property. 11. For information on the original test, see Ken W. Brown, "The 10 -Point Test of Financial Condition: Toward an Easy -to -Use Assessment Tool for Smaller Cities," Government Finance Review 9, no. 6: 21 -26 (1993). For information on the updated test, see Dean Michael Mead, "A Manageable System of Economic Condition Analysis for Governments," in Public Financial Management, ed. Howard Frank (Boca Raton, FL: Taylor & Francis, 2006), 383 -419. 12. International City /County Management Association, Evaluating Financial Condition. 13. The quick ratio represents a more conversational approach to evaluating an organization's ability to meet its short -term obligations, preventing current assets like inventory from increasing a local govern- ment's liquidity. For more information on quick and current ratios, see Earl R. Wilson, Susan C. Kattelus, and Jacqueline L. Reck, Accounting for Governmental and Non- profit Entities (14th ed. Boston: McGraw - Hill Irwin, 2007). 14. Robert J. Freeman, Craig D. Shoulders, and Gregory S. Allison, Governmental and Nonprofit Accounting (9th ed. Upper Saddle River, NJ: Prentice Hall, 2009). 15. Gregory S. Allison, "How to Read Governmental Financial Statements, Part 1," Popular Government, Spring 2000, pp. 23 -34; "How to Read Governmental Financial Statements, Part 2," Popular Government, Fall 2001, pp. 24-31. 16. Stephen J. Gauthier, Governmental Accounting, Auditing, and Financial Reporting (Chicago: Government Finance Officers Association, 2001). 17. See, for example, Wilson, Kattelus, and Reck, Accounting for Governmental and Nonprofit Entities. 18. If a local government chooses to in- clude an internal service fund in its analysis, it would use the set of financial dimensions and indicators selected to evaluate the financial condition of governmental activities and enterprise funds, given that financial statements for internal service funds measure economic resources using the accrual basis of accounting. 19. Wilson, Kattelus, and Reck, Account- ing for Governmental and Nonprofit Entities. 20. Financial performance represents a relatively new financial dimension in local government. For more information, see Stephen J. Gauthier, "Interpreting Local Government Financial Statements," Govern- ment Finance Review 23, no. 3: 8 -14 (2007). 21. Wang, Dennis, and Tu, "Measuring Financial Condition." 22. The authors, in consultation with the Local Government Commission, recommend this approach. 23. G.S. 159 -8(a) defines "available fund balance" as the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts. 24. The Government Finance Officers As- sociation standardizes available fund balance by dividing it by general -fund operating revenues. For more information, see Appro- priate Level of Unreserved Fund Balance in the General Fund, which was adopted by the executive board of the Government Finance Officers Association on February 15, 2002. It can be found at www.gfoa.org. Click on GFOA Recommended Practices. 25. See G.S. 159 -55. 26. G.S. 159- 55(c). 27. Linda Hird Lipnick and Yaffa Rattner; The Determinants of Credit Quality (New York: Moody's Investors Service, 2002). 28. See, for example, David Edwards and John Clayton Thomas, "Developing a Mu- nicipal Performance .Measurement System: Reflections on the Atlanta Dashboard," Public Administration Review 65: 369 -76 (2005). 29. The full dashboard is available as an appendix to the online version of this article. Go to www.sog.unc /edu /popgov /. 30. We used actual data from a local government to construct the dashboard for Capital City. However, the purpose is to present the approach rather than to draw specific conclusions from an actual local government. 31. Because Capital City, like many local governments in North Carolina, has only one enterprise fund, the dashboard does not contain business -type activities, given that the data would he approximately the same as for the enterprise (water and sewer) fund. 32. We used hypothetical benchmarks for Capital City, realizing that local governments may use a variety of sources for establishing their benchmarks. FALL 2009 13 a) o .> (II 15 0 <0 CO O) o) In2 CL C a) c E au'i 0 0I c 2, 0 U C 0 C L X o =.ova) 0 (p (a 0 U) N _0000 o > > 2 -v o 0 C CO 0 FY Ended June 30, 2009 o o N C ` O O E O c d � C o U O E Q y0.. O U 0 W 0 u- a) O cn : c O o 0 c CO CO 0 w 0 0 0 aa) c (O N ;d C) E a) c co _o c a) C (OA 0 C -C U.0 0 a) 1. 0 U `) O O 0) Financial Performance N O ri I�- 10 (O CO- N U U L c � O V U X 0) O U - O U 0 ., .O >, co c -0 0) 0 C 2 Uw•''0 U 0 C aD U > O U O X a) 0 (0 U ( N .0 c o_ a 0 ax u) ) Self- Sufficiency a 0) o 0 0 0 To • - 00 .Q 0 c U 'C C c O Q U. a) :2 u) o •U_ > O co U) N -0 co C a) E .- c 0 O Debt service ratio O V) c O c y=. ai . fa o o c 0 0 u0i O 0 a) N Y • E.0 c E o a0i a o U Financing Obligation c O 0 U a) o) 0 3 c E c r (v O U Q `? -o N E to_ 2 cn c 0) 2 0 -CB -. a) a) N O O o u) a) a) Y c co C O m = S c C u) > c 0 O N _C •- U O 4- 0 C O C) CO E E t O .co C CD O c E u) 0 C 0 •c us- a) Y iS c .o c u) O 0 0) a) N a) O Q o a) o O (a a) o co`o a? c > vi ui ai 2 N 1' co 0 t; a) U O c CU X C° Z' a) CO - N E "0 a) c CO 3 a) E.- u) c -cs c S a) U E > E a c a) ) 4- 0 L ..0 0 > C O O 0) ` .....,u) w ' D c U o0-'= a) E o �c�m -a "8 3 1' " c E co E 0) a$ c U 0) c U O c 0 , O a) C O • C 0 C N a) U U O c j,.>. = 0 E 0- (n (n as 13 > a c 0 `p 'c a..0- -(n � 4- 0 N c .0 u) "C":') a) .L L c m a o c (v.0 c vic • O v c a c a) �c.� (7:1 c E (a m .c 0 c Q - a. .c c c -° m En m d o 0 N co FY Ended June 30, 2009 0 rn 0 0 cD Q co (0 0 Tui3 (0 LL a Financial Performance co cD o self - supporting Ci) C/i". a) co cco .c > 0 0 E -to (t) c O (0 (0 CU) 41)41) C a) c co eL 4-= (/) .c u) 0. Self- Sufficiency Financing Obligation E 41) 0) 44 cu co 0. .c 0 2 ui ,.,, 2 (0 ...., 0 w „,- a) _c 5 -c 0 ,a) 4 c 0.9 .-C „ 0. - Q. , = 0 4- 1:3 0) X a i al u) CO -r_ C 0 0 -D. c a) = as EL) 10 cu .g. -8 0 ...d .0 a)CD coC w".g ? 22 (1) .- *C.: a) 0. ...... ? : (41 0 w9- g 13 ,2 g 0 a) o) a) (0 co Ts -,•-• c (0 C Ca • CD 0 17 -E E 22 ,_. . ascoo as 4--- c 6 cu ; .22 r-, a) CD -o -to C 73 a) CD 2 -g3 (0 >-, o 0 4--R _g E _o c .cn CO -,-, CO a) O a.) a) C _o a) o zi .E2). o_ a) co • E To -CTI i-- 0_ a 42 "0 1,Y. C - Cf) Q_ 0_ V • C•1 (,) 2 a) E c 0 0 11.1 0 0) c U) a LL a) 0. a -a F-1 > < a) c-ri (13 co C' Ti a) E c < > OCU '-0 4g 42 (..) o c a) 00 0 0 o < co 0 13 .0 c co 1- a) a) a) E. 0 0 (0 Financial Indicator 0. Financial Dimension 0 0 C c0 Statement of net assets 1 -5 0 0 0 10 ci Statement of net assets Net assets ratio 0 0 0 10 Statement of net assets cp 0 ID E 106 0 _c 0 -a 45. 0 x c 2 u) CO 60 6/) ci) o w _ w 60 60 1. a) 0 0 0 c 6 o a) a) o Z u) 0 0 C 1. 0 Ct. (610 00 (0 a (0 0 (1)61 a) E co cu (,) o (i) 0 c co co 0 E a) as La > a) 0 o a) en 7; csa c a) a) ..0 C a) a) E c9 `Cs a) c cti .- T6 2 22 '5 ca 0_ C05 as c ..a -= .— 0 2 _LD (,)L. 0 > 0 < .0 . C . (D. 4a16!) Cwx o u) C a) 60 co as 15 a) 4 a) 0 -6 > 0 0 Crl E ° (1) as a) cuE rn .t) c o ..c a) > c c3) t i 3a) 41:3 4.2 -a if) Ti _c (I) 7.) c c • 61) -a 0) 0 c cts 113 W c • CD a) a) as .r2 zs1:3 ti) C co L.- 0 c c > 9-- (:5 -a CD > c RI a) a ..c c _c 1— qz N (1) U) a) Enterprise Funds 1 Financial Dimension co 0 cr) 0) Jo CL a) (0 0 c a 9- 0 2 a. CD > c a) (i) U) (0 4(5 a 46 a) (a E a) T6 2 co a. a) a) a) co 0 O • 0) c s.u. O .0 Eco (0 (1) 10 CO 113 To- E 0 -6 0 "" CO CO -0 a) > 'a a (0 0 co co as a) E 10 C V) cla U) co CD CO a) o c 0 co c a) ii2 co a) a) - E To • 0 a) > c0 co a) 0 a) co as 1) (1) co To a) .-g- '5 co --di "L'' a . c co 6 i-D- CO 0= 1.- C a) CO a tr.: .0 C 0 a) 4:-_ CI) _c .a) in Z ..c a c o to co • ° - 4- a) O c a) 0 O o u ) c c ...7.. la = (a Q a) . 2 El) a) _c as 2. - .c"' 0 E 8- 8- o a) O (n- ID Z -C :F.. c 1 2 a 4- (0= 0 • a.' > 0 = OO I"; d cr a) .• 17s 2 a) .c._- a c c ..- 2 co a) 0) Q. c U) X -.-•„ , a) co co U) • c -a 0 co 0 .., ▪ ....s c 4... C 46- _2 E 0 El a) c co ..ca c E E C1) C -C ..0 0 Cli M tb- i13- w co • c co O 0 -0 7) a a) a)(/) L-a)-awalc O a a = o -cs 'C'' 0 .-) c ) vu a) c . 0 c -c ° • o c .6° c.) c c >, -o 'di w ' E -° c > 0 CD a) cn = ,.....m -C "C 0> a9 (7) —•0 .'" Q. 0 M X a) a) -c — a) 4-- a 0 CD TO 8 5 0 :0 e) > C 413 —I C75 ai " CD CO Q L Interpretation Data Source -a c (0 a) L. a) o oc Tss E 0= E a) 0 c 0 Ll. c3 Ta (13 ca cri c0 LL a) E c .a) a) ;5 > 0 (9 2 a) 0 c 0 LL a) a) 2 c 00 W 0 (/) CD 0 a) < 0 c,) a) _o _ c as c C 0) c E 0) 0) a) cD (0 (0 revenues. c t (1) a) CD CD X c (1) E 2 8 („- c c (0 C ..o 0) 0)0 CL 02 >, 0 a) -a a) Q. a) 0 annual debt ui a) a) E 0 ki C ta... 0 T6 a) 2 o c cs, c to co cn '5 a.) E >, Ti e - .26 a) .8 E 0. r a)--.a)a)x a) -a (1) a) -a a) 0) o rn 2 .-5-< a) c a) 0- c — x w 0 00 5 -E. Ft) = . 0 E a) (E3 E o (n " 0 a) 0 -a a) 15 " 0) < .2 (1) a) 70 2 0 cn C O CD • E c-) E E a) > o 0 c 0 c 0 0 E!L. 0 0 0 (0 (0 o 0 co (0 u) a) .42 73 G O 0) • a) :— a) E > c 0 >. • -0 0 -0 1:5 .c En 70 (0>0 P 0 0 475 0. 0 0 0 1— co 0) 5,592,787,617 ci Balance Sheet • cu 0 0 GO E k") C13 X 2 (I) .0 • o 0 v, — • >w, .0 0 0 a) 0. CU a) = 73 fa (0 • — u) Cn > .> 0 C13 < "0 U) (0 0 (0 (0 .0 0 a) E if) 0) (C) (C) 0) Addresses extent to which a) 0) (0 a) a) a) 0 0 ui .-z- E a) = as 45 c co = T.) 0) G 4= 0) 0 a) c .c O c„ 4". (1) (7, • 0 G L.= GOcn To > .c G o c c (0 • = (0 4— 0 O G CD T3 45 E o E c7, G • La-s • > ▪ 0) (15) (1) 4— _ r D • 11) cp ..— .0 (/) a 2o o a• l.- ,T9 vi o .111 al E 2 ui 8 . co w 4— 0 0 8 -5 L") t • _c 730) o — a) c (12 -oa) c3 0 0 :Li -c -0 — as -?-5 ma.) if)) - - o E co c — .c a) a) 0.) G > .9 0.) > 0 ,...(13 co, 2.) a3 (1) LO 4— To (1) 0 GO • 73 cn 2 a) (1? I— Cl 0 2 I-- 0 (0 .0 0) 0) (0 0 a. co a) 15 4- 0 0 _c Li? N c. Yr Handout 7 2010 Planning Session General Fund Balance Available for Appropriation 0.2 0.1798 0.133 0.1373 0.141 Seriesl Linear (Seriesl) FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 U: \Sylvia \Excel \EXFILES\AUDIT SCHEDULES\AUDIT PRESENTATION \2009 M W Z OW I- U W W W = C9 0 O O Z UO U Cash on Hand June 30, 2009 W E (o W W U W G1 GENERAL FUND NOVEMBER W 0 U 0 SEPTEMBER H J LC) CO N o) co co N N- O N CO O CO M O) N O LO ' 1'- O co O O N CO ti CO- ti O CO- N N Nt CO CO CO ti LO �- T-OI` (fl� -�... T- r- N CO N Co CV co �P co d' Co co Co O tI) LC) O) ' d 00 CO O O t!) (C> O N- M Co Nr T- co 0) co ti LC) N O LC) CO CO L) M CO- M t- co CO CD OC.ocococ)MtoCO 00N. Co o) M O O LO CO CO O M 00 O O OO M N 0) LO N to CO CO I.- O co — c- M Co V- .� C.C) d' Oo Co 1-7 CO to O L0 d' O N ti Co co N to O CO LO N CO 1` CO N M N M O LS N • O CO CO CO N Nt CO L Cr) (0 - e- N- CO 1- N CO- Cr) r- N d 00 M N- F: M O O O h 00 CO CD CO T- CO O O d' CO CO 'd' t1) co O CO L CO ti CO L N • O CV- NI- �t O M M N M N CO 0) T- LO CO LC) M-- 0.0 N- 1-- trc 1~ 0) 1` O CO 0) V' LC) 1�- 00 co 0o co- coo N N CO 1 O M O CO N N M CO CO CO O co d- CO CO 's LO- co co co co tiO CZ MO MN ti co ct C) Co O O M O CO ti in co O - O N N- CO LO ' ' ' r- O t() tom- C` (` r • O N 00 t1) Co 00 CO C.o N N CO O •tt N d' O CD IX) T- N r 1- M r e— M M a) a) v) a) c c ac) a6 c >, e co a) o) � Lu (-) - Q m • 0 � a •c a) W cn 0 0 0 C 0 co >, s= u" I) 0 E U x E oo 0 U U 0 o o tt ) H a c c F' • o as o o U V a o o o U U N ,c ✓ o c >, Q a= U o 0) _ o CO • - O O <COa.0 -<O 0 Cr) W0Oo ZO and School Reserve J V s� a n 0m N 6MD V O 7 M N a M OD < aD u07 t00 600 O m O co N Qt, sr 0 600 O CO V m O CO M N r N CO N 0) (ui m C7 N 0) r a0 O n V Q m n O m m N m 0 tm0 Q E0 r m Et r O M O 00) CO r O .M- t+) CD 9 O O C) u) co co 0 N O a M a 0 a 0(0 60 M 0 st 0) pi m N V s {+) 'i°+ N N N CO r 0 N.. J O= N N N N N o7 N N N N N N O C) a r oP N = M N p E9 69 fA fA (A EA f9 f9 f9 (A i9 f9 f9 69 f9 fA N O 69 69 69 FA 69 i9 69 EA 69 EA fA 69 69 oimo(0 V N N CO N 0) 6D O) N. v m m 0 r O O N N N 0) 69 69 6A 69 VCO v n 0) CO O u) CO m m V o) 6y N (O N m M O n tD O m m V N N M N n CO r r CO 64 69 6A 69 69 69 69 6A N 69 M 69 N $ 14,006,747.00 e e m CO n CO m C0 0 M cM) 4 N c6 OS O <t- EA O F V N r V 0 u) V 0 N 0) M 0) CO CO 0 m CO u) 0 m M O CO N< 0 o) D) si 07 ti n u) N 0) V O N u7 M 6V u) t0 to M V CO T- 0- 0- 0 m 0 m n V n CO t0 u) N M O M V to m n O N D) N n (0 N 0 0 0 N t0 n n M N M t0 O u) u) 60 N N n N N r N N V 0 r r r r r r r r .- r r 69 69 69 64 69 69 E9696969 69 69140 c Q' 9 O CO 0 t0 O e e tp CC ° 0 M N O N m N M n n 0) 0° p 0 acv m tN N N OM7 n CS O sr n m N sr m M m V t0 r M m O V O CO 0 2 12 O 0 m N u) s) 0) 0 r m m sT N O yOj M V07 Cr) 0) 0) N (0 M M N V V m OJ V' ^ m 0) 0 n CO T 0 N 6 6 m 0) 0 co Q t' n n N M N n m n O) u) Q) 07 W u) N M r M V 0 V N u) > 6.°7.Cr rr CO u) u > °aMr - rr r r rO rMN W4 r W 6'7 0 r r m W CO CO 0' 69 69 0 69 69 69 69 69 69 69 EA 69 (A fA 69 69 fe E) 69 69 EA 69 69 E9 69 69 EA 69 69 69 N 4 N O CO pp o o N M 0) m M M CO CO n M 0 n 0) O m M CO M W m N N N CO N m M O M 0 0 CA '� 0 CO O 0 W o) O � '�!.1 O N u) OD 4 0) u) O h 0 o) (4) N n 0) cn- 00 CO 0 m CO n N n n n N m 0) M N t() N M CO m CO CO n V M t0 h CO f0 0 0 u) m o m t0 O OD co O O N N N 6" P n 0 O u) m 0 0 N co C a r Q 69 69 69 EA 69 64 69 69 EA 69 E4 69169 69 GENERAL FUND SALES TAX 40 Q M a m a EA 69 69 69 EA 69 69 E9 69 E9 64 69169 co o u) 4 CA r c 0 o0] 0 0- N CD u) n V a 0) n- m O y N N N CO EA 69 6A 6A E) CO 69 69 69 69 69 61- 69 M CO A N N ) O y M V M N 00) 69 696969 69 69 69 69 6964 69 641E3 m 0 N 64 V 0 o o m 0) 0) 0 N M 0 m N M el 6 O t0) n co - 0)) 1 05 N m 0 69 01 69 f9 E9 69 69 69 69 0) 69 69169 V CO N n M n u) u) O 0 O M N CD O N V 0 CO m 6V 0) n V ;.: V 0) M O u) u) M 60 m u) N r m n CO 0) M m M 0 m N O N n N 60 N M N 0) m O CO 0) N CO N ;4n�P (0r 05,f uiN:ad 690c4,06969-0690 64 01 04 EA 0 m m 0) 0- u) M m N 0 m m m CO 0) u) 0 u) CO 0 V 0 M u) n . V 0 O r N O N m (0 O O 400 N N O M CO CO M 0 N t0 V CO V 6 & 6 6 6 6 6 V co 4-0(0 M M M N N M N N N N N M a M 69 4 0) 64 EA E4 69 69 69 69 64 69 64 0) 0) o) 0) Q N- 0) u) M r u) 0 u) O u) 0 N O V u) N V n u) m N n V u) m 0) n m D) N M s} r} t) n0 CO CO V r CO (0 V .n- oV) M co 00 CI M 40 N V 00') M 007 et nO V 69 69 E4 69 69 69 69 69 69 69 69 CA 69 n 0 ) 0)(0 (0 rm Oo O N M N M r 0- a N N 0 M 0) I.- s{ t0 N CO m n O 6V n 0) n 0 0 0 N u) N N N N CO 0) n 0 m m 0) tO u) 0 Yr- V 0)0)0)0)0)0)0)0)0)0)0)0)0) 69 E9 E) m 64 !A EA 69 69 69 6A E9 E9 EA 69 EA CO 0, 0) CO 0 o o M t0 M N co n N 0 n m N 0 0 O CO CO CO n n u) M CO CO O M 0 N 0) N m CO n (V 0 M O m N 1,--7:, tD n O (44 V O 0) r V� V O n m N N M O N ~ y' M 00 m m 0 .01: N 0 t0 N ,�ajj N t0 N y ids y m O m CO CO CO R u) CO M O O n W V u) 0) O N s0s} 0) u) m m 0) n 4 r r 07 r0 Q of E N 0 N N N o) N N N r N N 00)) N a N 0)0)0)0)0)0)0)0)0)0)0)0)0) 69 69 EA 0)43(00)0)434009430)0)630) 0 V u) m CD O n Y m mm m at O) at CV o a n Ei LN N N N 4 4 a 0 EA 69010169 69 EA 69 E4 6A 69 69 CO M .4- 60D t00 CO CA i6°iy6OtciOV co O O tq m O u7 co co (9 69 69 69 69 69 69 69 69 69 69 69 69 $ 3,339,919.00 $ 3,345,867.00 0 0 N (M') CM+) $ 1,115,177.47 O LO n O 6A GENERAL FUP N- N CO in 0 0) 0) 0 m V 0 n u) O V n r CO n V M r V CO CO to O m mr: N n u) 0 . m N „vowel r N CO m CO N. N 0 N M E. 0 m CO 0 0 0 N 0 N m 0 V N 6A O O n 0 0 60 OO N u) N 44) ;L CO N m V M 0 V M N m r 0 0 a N r O Ni 69 69 69 69 69 69 64 69 64 69 69 69 69 e M 0 M n M CO V CO N m 0 n m M 0) M V M o) m m n m 0 m M u) 0 m m M 0` o) 00) 0 M t6 j N 0 O 0 67 0) N M o) m m u) M M CO p m n N M O r 007 r 4 O CO CO n CO OS CC� 1 O OS V m to m N V 0 0) 0 u) V m co LO m M CO VV CO n O N N N a M M V M M V M M N M M V M V (0 69 E9636969 69 696969 69 60 0 6469 O N p 0 0 0 0 0 p 0 N p N N O p 0 0 O ' O _ _ O N 0 N N N EE O O 0 N O N - O Z` N ,- 0 V 0 N W L (0 L N N N CO CO it ?-:" 0 O) O O N N N O j Q o Target October O N 0) r 0 6A t? 2% COLA 15318,318.481 A ci o le tc?. 03 a.; co co; t.:, 4 co I,- ai '4) fi...1 ( . 1' c4 cg c- 64 • oi cci 49. cc2 ai co- 43. o P- ci ‘‘). 2 ) I1% COLA 0 CO cO CV te) Cii ia e- te 03 T- 0 0 tO Csi csi *A. nt CO ai tO CO <Ai 41. 5130,158.781 CD I's •o: tD v.) ai Ea nt 03 a; tt, 0 co' 40 0 VI 1-..: 03 CO, v- 69 co. 00 CO CO et 0 OA ei c14) el: •r• Subtotal Cost Pro -rated for January implementation Less Enterprise Funds 1 Less 50% of Social Services Subtotal General Fund Costl Retirement < 0 Medicarel Total Estimate 6. 0 0 ct • t- ° C • 0_ O E) 0 co CD a) E as 0 11. •C wa) 0 • '0- E E co • c6 2 '4" • c- 0 • "Ct N $318,318.481 CD el 0 0 0 11) 00 CD Cr; Cn el ei T— El- T$259,978.441 ) Position Title Month -To -Date Gross Amount Subtotal Cost Pro -rated for January implementation Less Enterprise Funds Less 50% of Social Services Subtotal General Fund Cost Status 12 a) CD ct • t- ° C • 0_ O E) 0 co CD a) E as 0 11. •C wa) 0 • '0- E E co • c6 2 '4" County of Harnett Budget Drivers For Fiscal Year 2010 -2011 (Starting Point) Revenue Sources: Planning - Permit Fees Inspection Fees Ambulance Fees Expenditure Increases Debt Service Retirement Match Increas€ Areas of Concern: Health Insurance Funding Workers Comp Funding Handout 12 2010 Planning Session Budgeted Rec'd to Date Balance % Collected $ 118, 916.00 63, 580.00 55, 336.00 53.47% 640,000.00 542,525.00 97,475.00 84.77% 4,101, 000.00 1,760,178.84 2, 340, 821.16 42.92% 300, 572.00 391,005.00 691, 577.00 Harnett C O U N T Y ,y ii llL Handout 13 2010 Planning Session Human Resources Department Human Resources Project Updates Board of Commissioners 2010 Planning Session Employee Assistance Program www.harnett.org PO Box 778 Lillington, NC 27546 ph: 910- 893 -7567 fax: 910 -814 -0350 What is an Employee Assistance Program? An employee assistance program (EAP) is a work -place benefit/program to assist employees in resolving personal problems such as family, financial, emotional, or substance abuse. EAP plans are paid by the employer can be made available to include immediate family members or anyone living in their home. What are the benefits of offering an EAP? EMPLOYER BENEFITS • Potential lower medical claims • Lower medical claims • Reduced turnover • Increased employee productivity • Provides a new supervisor resource • Reduced absenteeism • Decreased workplace violence • Improved employee morale EMPLOYEE BENEFITS • Services provided at no cost to employee (usually 3 -5 free sessions per problem) • Confidential • Usually available to members of employee's immediate family /household The Human Resources Department is in the process of obtaining quotes from vendors. The cost is under $20 per employee per year. (Estimate: $15,000 - $20,000) Affirmative Action Program The Human Resources Department is working with a consultant to develop an Affirmative Action Program. This program is required as part of the federal grants we receive. See the attached Affirmative Action Obligations for more information. What is an Affirmative Action Plan? An Affirmative Action Plan sets employment goals not quotas for minorities and women whose representation in the workforce. The plan will also describe efforts to reach out to veterans and disabled individuals. The Affirmative Action Plan will become the guide for a program that should result in fair employment for all race /sex groups. strong roots new growth Harnett County does not discriminate on the basis of race, color, national origin, gender, religion, age or disability in employment or the provision of services. Handout 14 2010 Planning Session Affirmative Action Obligations 1 As a federal contractor, Harnett County is required by Executive Order 11246 to implement an Affirmative Action Program. Executive Order 11246 creates affirmative action and nondiscrimination obligations for federal contractors. It is enforced by the Office of Federal Contract Compliance ( "OFCCP "), an agency within USDOL. 2. The County's Affirmative Action Program will have several components: (a) A written Affirmative Action Plan for Women and Minorities, which includes a quantitative analyses of our workforce compared to the composition of the relevant labor pools. The Plan analyzes whether Harnett County's employment of women and minorities is what would be expected, given the proportion of women and minorities in the relevant recruitment area. The Plan sets goals for the upcoming year based on whether there is "statistically significant" underutilization in any particular job group under OFCCP analytical framework. Goals for women and minorities are expressed as a percentage of hires for the next plan year. • Goals allow us to focus affirmative action efforts in specific job groups where diversity is low. Goals are NOT quotas. Goals drive outreach; they do not create preferences in individual decisions. (b) A written Affirmative Action Plan for Veterans and Disabled Individuals. This plan is not required to include a utilization analysis or goals. It simply describes our efforts to increase veterans and disabled individuals in the applicant pool and to promote qualified veteran and disabled employees. • It also describes our internal processes to ensure that barriers to diverse employment are identified and removed and to evaluate progress on diversity. (c) Affirmative action programs also include action - oriented activities designed to increase diversity. These programs include special efforts at recruiting, training and outreach programs designed to increase the upward mobility of minorities, women, veterans and the disabled. . We are in the process of drafting our Affirmative Action Plans, and will have them completed by the middle of February. Other components of our Affirmative Action Program will be implemented in the spring and summer. RALEIGH 616678v2 Harnett C O U N T Y Safety Handout 15 2010 Planning Session Risk Management and Safety Updates Board of Commissioners 2010 Planning Session Human Resources Department www.harnett.org PO Box 773 Lillington, NC 27546 ph 910- 893 -7567 fax: 910 -814 -0350 Training The Summit Training Web Program was rolled out in early January 2010. This program has online courses that each employee can take at his or her own pace. There are currently 13 required courses that are due at the end of the year. These courses cover topics ranging from back safety to ergonomics and defensive driving. Several employees have already completed all of the required courses. Department Heads were invited to review the course descriptions and have their employees participate in additional courses if appropriate. Arrangements are being made to work with employees who do not have access to computers. For example, group sessions are being held at the Lillington Public Library one or two times per month. Training should be focused on the most frequent and most severe cases, specifically Workers Compensation claims. The Summit Training Web courses do address back safety and ergonomics which seem to be two main factors in the claims for 2009. Additional training may be required with specific departments to address specific types of injuries (ex: exposures, knees, shoulders). Driving related courses are also being required. This should address, in part, the auto related claims. Safety Committee The Employee Safety Committee had a kick off meeting in mid December. Safety Representatives have been designated for each department. From those representatives, eight committee members have been selected. Each representative has been assigned a member to report any safety concerns and also to send in their inspections. The members will meet monthly to go over inspections and other safety and /or training topics that need to be addressed. Representatives have been invited to attend any meetings they wish. There will be one or two meetings per year where all members and representatives will be asked to attend. The next meeting is scheduled for 1/28/2010. The vice chair and secretary will be elected at this upcoming meeting and will then form the Executive Safety Committee. Safety Policies The Risk Management & Safety Coordinator is currently reviewing all Safety Policies for necessary updates and changes. The plan is to present two policies to the Safety Committee each meeting. Sub - committees will be formed to review the policies and make suggested changes and /or updates. Once completed, the updated policies will be submitted for legal review and Board approval. strong roots • new growth Harnett County does not discriminate on the basis of race, color, national ongin, gender, religion, rage or disability in employment or the provision of ervic:as. Risk Management & Safety Updates Page 2 Risk Management Workers Compensation Summary Calendar year 2009 finished with a total of 49 reported claims, 38 OSHA recordable claims, and 22 open claims. Of the current open claims, it is expected that 15 will resolve and close within the next three months. There have been 4 reported claims in 2010 to date. The departments with the most reported claims include Emergency Services (16 claims), Sheriff Department (8 claims), and Social Services (7 claims). Hand and wrist injuries are the most highly reported claims, followed by exposure claims, back, knee, and shoulders. The majority of open claims are back injuries. Focus for 2010 will be reducing the frequency of the most frequently reported claims (hand /wrist, exposures, backs, knees, and shoulders) and the severity of the claims that do occur, specifically back injuries. Please see the attached "2009 Workers Compensation Summary" for more detailed information. Property and Liability Claims Calendar year 2009 finished with a total of 38 reported claims and 18 open claims. The majority of the claims were covered under Auto Physical Damage, Auto Liability, and General Liability. Please see "2009 Property & Liability Summary" for more detailed information. Focus for 2010 will be reducing auto related claims. Loss Forms All loss forms have been updated and a few new forms have been added. These forms will be put on the website for easy access for each department. Upcoming Items Risk Manaqement and Safety Coordinator Handbook The Risk Management & Safety Coordinator is developing a manual for all procedures related to this position over the course of this year. Procedures will cover items such as how to report a claim, investigation, processing a deductible invoice, claim handling procedures, and many others. This will form a uniform process for each task that falls under this job description. This will also assist other Human Resources staff in the absence of the Risk Management & Safety Coordinator. Return to Work Policy An Official Return to Work Policy is essential for minimizing the severity of workers compensation claims. It is my goal this year to write and implement a policy that will apply to each department. This will include reviewing job descriptions and categorizing them in sedentary, light, medium, and heavy work categories. In order to gain the maximum benefit from a Return to Work policy, each department should have alternate work available for temporary sedentary and light work restrictions, and also be willing to temporarily accept restricted employees from other departments if necessary. Post Offer Employment and Fit for Duty Tests A meeting is scheduled with a vendor to discuss Post Offer Employment tests and Fit for Duty tests. These tests will allow the County to determine if a candidate for employment is physically capable of handling the job duties required and will also assist in determining a current employee who is returning to work after a medical absence is capable of returning to his /her previous job duties. These tests will reduce potential liability by catching physical limitations that may lead to injury, re- injury, or inability to perform the required job functions. Prepared by: Melinda Bethune, Risk Management & Safety Coordinator Human Resources Department www.harnett.org 910- 814 -6402