HomeMy WebLinkAbout1st Quarter_FY 2026_Major Funds_Financial Report_Highlighted
Quarterly Major
Funds Report
1st Quarter Fiscal Year 2026
September 30, 2025
Table of Contents
Overview ...................................................................................................... 1
Budget Ordinance – Section 16 .................................................................... 4
General Fund ................................................................................................ 5
Harnett Regional Water Fund ...................................................................... 6
Solid Waste Fund ......................................................................................... 7
FISCAL YEAR ENDED 2025:
General Fund:
AdValorem tax collections exceeded budget by $2,918,835 and exceeded the collection for FYE 2024 by 7%, indicating continued
growth in the County.
Harnett County Finance
Quarterly Financial Review
for quarter ended, September 30, 2025
Today's presentation will focus on the first three months of the new fiscal year. This presentation also includes preliminary financial
information for FYE 2025 but will be updated upon completion of the county's annual audit.
Asrequested,a"scaled-down"financialreviewisbeingpresentedtodayandwillfocusontheGeneralFundandtwoEnterpriseFunds,
Harnett Regional Water and SolidWaste. The fullanalysisof allfundstoinclude cash balancesand salestax activity,willbeavailable
after today's presentation, on the County's website and can be accessed on the Finance Department's web page.
The collection of sales tax exceeded projections by 8% and were ahead of FY 2024 by 7%. The County's sales tax collections
remain strong.
Overall, revenues for the General Fund remained strong and exceeded the prior year; however, despite the increase, current year
revenues were not sufficient to cover expenditures and the County will use approximately $4,000,852 of fund balance.
Expenditures for the fiscal year totaled $176,733,322, an increase of $18,840,528 over the prior year. As the county continues to
experience significant growth, the demand for services continues to drive staffing increases as well as other related expenses. At
the function level, the largest percentage increase can be attributed to the Transportation Department at 57% which was due to
the purchase of transportation vehicles in the amount of $889,640 utilizing State grant funds. The largest dollar increase
($8,146,102) was for Education in the amount of $38,083,704 or 27% over the prior year as the County continued its efforts to
meet the needs of the district as well as the loss of low wealth funding.
Quarterly Overview 1 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted
CURRENT FISCAL YEAR ENDED 2026:
General Fund
Revenues reported through September 30,2025 totaled $17,639,935,a slight decrease from the same period last year of
$18,864,578. Although tax collections and sales tax revenue increased, the overall reduction was due to a decline in interest
income, resulting from falling interest rates and reduced cash reserves available to invest.
Harnett Regional Water:
Revenues for the fiscal year in the amount of $84,181,152 were ahead of the prior year and exceeded expenditures by $20.54m.
This significant increase was due to the required accounting treatment of the recording of fixed asset additions (water and sewer
lines) in the amount of $31,947,378.
Expenditures for the fiscal year in the amount of $63,636,238 increased 22% compared to the prior year. The increase included
the cost to treat additional flow for water and sewer services, capital outlay and personnel expenses.
Solid Waste:
Revenues for the fiscal year in the amount of $10,884,929 represented an increase of 22% over the prior year. The increase in
expenditures were due mainly for salary and benefit changes as well as an increase in the contracted services for waste handling.
Expenditures for the first quarter totaled$48,367,110; an increase over the same quarter last year of44%. The two largest drivers
of this increase represent the transfer of funds from the General Fund to the Debt Service Fund ($11,000,000) and the increase in
current expense funding for education. The current year budget is based upon the appropriation of reserves as detailed in the
Harnett County Fiscal Year 2026 Budget Ordinance, Section 16.General Statute 159-36 directs units of local government to levy
taxes or allocate revenue in an amount sufficient to meet debt due during the budget year. Debt activity is accounted for in a
separate fund and the General Fund transfers an appropriation each year to insure compliance with the repayment of debt.
Quarterly Overview 2 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted
Harnett Regional Water
The majority of the revenues for Harnett Regional Water are from user fees.
Solid Waste
The operating revenue derived from charges and facility fees continues to remain strong for Solid Waste.
Operating expenditures are slightly higher than the prior year but remain stable.
Solid Waste, Overall - The financial position of the Solid Waste Fund continues to remain positive in response to the continued
growth of the county and demand for waste services.
Revenues reported through September 30,2025 totaled $9,838,624,a decrease from the same period last year of $15,822,629.
This significant decrease was due to the required accounting treatment of recording fixed asset additions (water and sewer lines)
in the amount of $31,947,378.
Operating expenditures are slightly above the prior year but remain stable.
Harnett Regional Water, Overall - The financial position of the Harnett Regional Water Fund continues to remain positive in
response to the continued growth of the county and demand for water and sewer services.
Revenues reported through September 30, 2025 totaled $1,496,789, a decrease from the same period last year of $1,644,818.
The main revenue source for Solid Waste is from Enterprise Charges (user fees) and Facility Fees (solid waste tax).
Quarterly Overview 3 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted
Harnett County, North Carolina | Approved Budget 2025-2026 Budget Ordinance 31
Section 16: Compliance with Reserve Policy
The proposed budget for fiscal year 2026 contains an appropriation of $20,210,244 from fund balance. This appropriation
includes funding to the Harnett County Board of Education that does not meet the policy definition of “one-time” appropriation.
The Board of Commissioners are aware that this action may reduce the county’s unassigned targeted fund balance below 20%
as defined in the Administrative & Financial Policy.
During the development of the 2025 budget, the County was notified by the State that it would lose a significant portion of low
wealth funding for that fiscal year due to calculations using data set by the 2024 fiscal year. The low wealth funding is based
upon a complex calculation of multiple historical data points to include the averages of local tax rates, per pupil funding, per
capita income, and weighted sales assessment ratio.
Due to the historic increase in values between revaluation periods, the County sought to adjust its ad valorem tax rate as close
to revenue neutral as was needed to maintain current operations. Despite efforts to adjust the property tax rate near revenue-
neutral levels, a small difference of two cents would have preserved the county’s eligibility for full Low Wealth funding. Harnett
County, among a few other counties, was adversely affected through no fault of its own and we immediately sought legislative
relief. While awaiting a determination, the County was prepared to utilize fund balance to meet the current potential funding
shortfall in the 2025 year.
While preparing this budget, we have learned that more counties have since been affected, and we are hopeful that a
restructuring of the low wealth formula is forthcoming. A county-wide revaluation is underway to be effective for the 2027
budget year, and it is anticipated that the county-wide increase in property value may exceed 30%. The Harnett County Board of
Commissioners feel that to adjust the tax rate prior to a revaluation year will be premature and have chosen to utilize fund
balance to bridge the gap between the two years. The Board understands that while this use of fund balance for fiscal years
2025 and 2026 does not meet the definition in our policy, it is a justified temporary and strategic measure to address the
funding request of the Harnett County Board of Education.
The Board of Commissioners is committed to addressing the noteworthy revenue shortfall and restoring reserves during the
2027 revaluation budget year while balancing fiscal responsibility and our commitment to education.
Section 17: Document Availability
Copies of this Budget Ordinance shall be furnished to the Tax Administrator, Budget Officer, Clerk to the Board of
Commissioners and to the Finance Officer to be kept on file by them for their direction in the disbursement of funds and
collection of taxes and fees.
Adopted this, the 16th day of June, 2025.
2026 Budget Ordinance_Sect 16 4 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted
Revenue
Category Budget Actual Budget Actual Budget Actual
30 - TAXES - AD VALOREM -81,560,000 -83,791,703.86 -86,760,145 -89,678,979.71 -92,997,541 -10,936,702.90 -10,389,187.47
31 - TAXES - SALES -26,561,800 -30,207,510.88 -30,003,000 -32,447,545.36 -32,020,000 0.00 0.00
32 - TAXES - OTHER -1,164,000 -1,660,194.64 -1,300,000 -1,902,056.70 -1,600,000 -479,538.28 -436,673.64
33 - RESTRICTED REVENUE -23,773,916 -21,228,941.08 -24,162,507 -22,839,233.39 -21,293,302 -2,387,319.05 -2,830,506.75
34 - RESTRICTED REVENUE -6,100,000 -5,338,962.28 -4,000,000 -4,862,224.31 -4,000,000 0.00 0.00
35 - SERVICE CHARGES -16,578,749 -18,673,294.77 -20,713,080 -19,363,510.45 -21,288,108 -3,702,643.55 -4,396,135.50
36 - ENTERPRISE CHARGES 0 -6,325.96 0 -7,616.98 0 -406.53 -897.62
37 - FACILITY FEES 0 -3,487.26 0 0.00 0 0.00 0.00
38 - MISCELLANEOUS INCOME -820,092 -295,021.92 -1,126,523 -1,546,158.24 -1,023,855 -133,324.67 -811,177.13
39 - NON-REVENUE RECEIPTS -12,468,816 -95,803.00 -19,465,693 -85,145.00 -20,047,544 0.00 0.00
110 - GENERAL FUND REVENUE -$169,027,373 -$161,301,245.65 -$187,530,948 -$172,732,470.14 -$194,270,350 -$17,639,934.98 -$18,864,578.11
Expense Function
Department Budget Actual Budget Actual Budget Actual
00 - GENERAL GOVERNMENT $37,665,878 $37,283,153.59 $38,812,705 $37,975,405.79 40,098,524 15,313,190.99 4,242,138.32
10 - PUBLIC SAFETY $50,324,414 $48,266,396.74 $56,857,434 $53,754,913.66 59,072,614 11,653,041.18 11,204,611.09
20 - TRANSPORTATION $3,020,228 $1,765,441.27 $3,449,538 $2,782,777.10 2,898,288 361,822.93 680,002.65
30 - ENVIRONMENTAL PROTECTION $515,709 $492,049.20 $528,094 $483,666.26 577,477 111,487.96 93,130.04
40 - ECONOMIC & PHYSICAL DEVELOPMNT $3,295,554 $3,079,713.95 $4,228,024 $3,664,059.11 4,067,995 891,228.71 703,552.75
50 - HUMAN SERVICES $38,433,227 $32,009,151.53 $39,025,318 $34,007,716.10 38,694,520 7,850,717.91 7,076,750.77
60 - DEBT SERVICES $0 $0.00 $0 $0.00 0 0.00 0.00
70 - EDUCATION $30,119,584 $29,937,602.93 $38,257,070 $38,083,704.47 42,336,488 10,629,221.60 8,180,509.82
80 - CULTURAL & RECREATION $5,652,779 $5,059,285.10 $6,372,765 $5,981,079.23 6,524,444 1,556,398.30 1,389,684.73
110 - GENERAL FUND EXPENSE $169,027,373 $157,892,794.31 $187,530,948 $176,733,321.72 $194,270,350 $48,367,109.58 $33,570,380.17
110 - GENERAL FUND REVENUE (OVER) /
UNDER EXPENSES $0 $3,408,451.34 $0 $4,000,851.58 $0 $30,727,174.60 $14,705,802.06
Same Period Last
Year
FY 2025 FY 2026FY 2024
Same Period Last
Year
FY 2025 FY 2026
General Fund
Unaudited as of September 30, 2025
FY 2024
General Fund 110 5 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted
Revenue
Category Budget Actual Budget Actual Budget Actual
33 - RESTRICTED REVENUE 0 0.00 0 0.00 0 0.00 0.00
35 - SERVICE CHARGES -250,000 -1,297,115.47 -750,000 -10,794.71 -800,000 -153,084.80 -352,291.98
36 - ENTERPRISE CHARGES -2,113,000 -2,448,342.41 -2,418,000 -2,766,468.89 -2,418,000 -503,163.70 -674,385.93
37 - FACILITY FEES -40,635,000 -47,630,098.56 -43,600,000 -49,456,510.63 -47,000,000 -9,066,797.54 -10,322,667.09
38 - MISCELLANEOUS INCOME -340,000 -14,723,084.15 -455,517 -31,947,377.88 -377,000 -115,577.59 -4,473,283.74
39 - NON-REVENUE RECEIPTS -1,993,600 0.00 -2,982,700 0.00 0 0.00 0.00
610 - HRW FUND REVENUE -$45,331,600 -$66,098,640.59 -$50,206,217 -$84,181,152.11 -$50,595,000 -$9,838,623.63 -$15,822,628.74
Expense Function
Department Budget Actual Budget Actual Budget Actual
7111 - HRW ADMINISTRATION 8,811,539 6,401,417.80 10,936,679 10,360,088.89 8,942,007 1,246,765.48 1,572,129.55
7113 - LILLINGTON WATER TRTMNT PLANT 9,504,517 9,095,173.58 11,418,340 11,188,417.09 11,755,680 1,922,439.46 2,204,734.87
7115 - WASTEWATER TREATMENT PLANT 4,179,100 3,785,761.12 4,765,941 4,353,895.12 5,066,316 796,121.62 710,847.78
7117 - SOUTH HARNETT WASTEWATER PLANT 4,218,793 3,736,967.98 4,517,588 4,847,004.52 5,088,842 928,831.16 739,773.21
7119 - WATER DISTRIBUTION 7,439,204 5,974,479.38 7,531,165 7,122,982.41 8,591,075 1,689,306.68 1,484,629.43
7121 - SEWER COLLECTIONS 6,002,962 3,473,085.61 6,549,571 6,294,539.40 6,780,742 955,123.30 813,713.07
7131 - RETIREE INSURANCE HRW 75,824 75,724.44 55,426 83,785.81 98,449 21,058.35 15,043.00
9990 - NON-DEPARTMENTAL 5,099,661 19,518,297.23 4,431,507 19,385,524.89 4,271,889 0.00 0.00
610 - HRW FUND EXPENSE $45,331,600 $52,060,907.14 $50,206,217 $63,636,238.13 $50,595,000 $7,559,646.05 $7,540,870.91
610 - HRW FUND REVENUE (OVER) /
UNDER EXPENSES $0 $14,037,733.45 $0 $20,544,913.98 $0 $2,278,977.58 $8,281,757.83
Same Period Last
Year
FY 2025 FY 2026FY 2024
Same Period Last
Year
FY 2025 FY 2026
Harnett Regional Water Fund
Unaudited as of September 30, 2025
FY 2024
HRW Fund 610 6 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted
Revenue
Category Budget Actual Budget Actual Budget Actual
30 - TAXES - AD VALOREM 0 0.00 0 0.00 0 0.00 0.00
33 - RESTRICTED REVENUE -300,000 -418,365.90 -300,000 -453,883.60 -375,000 0.00 0.00
35 - SERVICE CHARGES 0 -8,172.54 -6,858 -7,593.55 0 0.00 -73,369.88
36 - ENTERPRISE CHARGES -4,122,082 -3,472,431.85 -3,912,000 -3,709,663.88 -3,514,000 -798,894.85 -896,873.59
37 - FACILITY FEES -4,822,000 -4,919,568.05 -4,822,000 -5,084,523.59 -4,983,554 -667,761.87 -660,230.84
38 - MISCELLANEOUS INCOME -185,000 -109,717.11 -185,000 -1,629,264.51 -100,000 -30,132.45 -14,343.35
39 - NON-REVENUE RECEIPTS 0 0.00 0 0.00 0 0.00 0.00
660 - SOLID WASTE FUND REVENUE -$9,429,082 -$8,928,255.45 -$9,225,858 -$10,884,929.13 -$8,972,554 -$1,496,789.17 -$1,644,817.66
Expense Function
Department Budget Actual Budget Actual Budget Actual
7410 - SOLID WASTE MANAGEMENT 7,763,141 7,002,160.47 8,364,989 8,133,451.92 8,567,860 1,482,633.75 1,456,919.23
7431 - RETIREE INSURANCE SW 29,712 23,993.00 19,356 15,649.00 16,728 2,500.00 3,985.00
9990 - NON-DEPARTMENTAL 1,636,229 2,107,556.06 841,513 1,822,961.94 387,966 0.00 0.00
610 - SOLID WASTE FUND EXPENSE $9,429,082 $9,133,709.53 $9,225,858 $9,972,062.86 $8,972,554 $1,485,133.75 $1,460,904.23
660 - SOLID WASTE FUND REVENUE (OVER)
/ UNDER EXPENSES $0 $205,454.08 $0 $912,866.27 $0 $11,655.42 $183,913.43
Same Period Last
Year
FY 2025 FY 2026FY 2024
Same Period Last
Year
FY 2025 FY 2026
Solid Waste Fund
Unaudited as of September 30, 2025
FY 2024
Solid Waste Fund 660 7 of 7 1st Quarter_FY 2026_Major Funds_P&L_Highlighted