Montgomery County Government: Organizational

and Fiscal Structure

Jennifer Hughes, DirectorOffice of Management and Budget

September 21, 2012www.montgomerycountymd.gov/omb

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Overview

• Organization

• Oversight and Accountability

• Budget Process & Fiscal Structure

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Oversight and Accountability• Internal Audit (Executive Branch)• Annual Audit of financial statements by an independent

audit (Executive Branch)• CountyStat (Executive Branch)• Inspector General (Legislative Branch)• County Council & Committees• Office of Legislative Oversight (Legislative Branch)• P-Card Monitoring and Reviews (Exec. Branch - DOF)• Expenditures over $10,000 (Exec. Branch - DOF) Other

forms of Accountability: Supervisory; to County Executive and Chief Administrative Officer; and to County Council.

• Media• Elections, Charter questions, and Referenda

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Major Differences Between the CIP and the Operating Budget

CIP• 6 Year Budget (Capital

Budget is the first year)• Approved biennially.• Infrastructure (roads &

buildings)• Long-life• Often debt-financed• Majority of spending is for

sitework and construction

Operating Budget• 1 Fiscal year• Approved annually.• Programs and services• Expenses typically

continue every year.• Typically funded with

current revenues• Majority of spending is for

staffing costs

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Budget Process Key Facts

• The County Executive develops and recommends budget proposals; the Council authorizes expenditures and sets tax rates.

• Annual six-year Public Services Plan, Operating Budget, and Capital Budget, and biennial six-year Capital Improvements Plan.

• Capital budget submitted to Council by January 15th; proposed Operating Budget by March 15th.

• Aggregate budget cannot grow more than CPI-U Washington-Baltimore without a minimum of six Council votes.

• Executive veto or reduction of items in Council approved budget.

• 1990 Charter amendment limit on property tax revenues. Charter Limit exceeded four times: FY03-05 and FY09. As of 2008 Charter amendment, to exceed the Charter Limit, requires 9 council votes.

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Summary: Operating Budget Process

• Sept-December: MCG Departments Prepare Submissions

• December/January: Agencies submit budgets to County Executive/Council

• December – March: OMB Reviews Submissions and Makes Recommendations to County Executive

• March 15: County Executive Transmits Budget to the County Council

• Early April: County Council Public Hearings• April – May: County Council/Committees

reviews budgets• By June 1: County Council Approves Budget

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FY13 ALL AGENCIES / ALL FUNDS

Net Transfers $7.50.2%

Prior Year Reserves $400.57.8%Fines &

Miscellaneous $245.6 4.8%

Intergovernmental $926.4 18.1%

Charges for Services $344.66.8%

Other Taxes $305.4 6.0%

Transfer & Recordation Tax

$141.0 2.8%

Income Tax $1,263.6 24.7%

Property Tax $1,471.6 28.8%

WHERE THE MONEY COMES FROMTOTAL APPROVED RESOURCES - $5,106.2 (million)

Non-Agency Uses $7.9 0.2%

County Government

$2,003.4 39.2%

M-NCPPC $124.5 2.4%

Reserves $381.5 7.5%Montgomery

College $290.5 5.7%

Montgomery County Public Schools

$2,298.4 45.0%

WHERE THE MONEY GOES *TOTAL APPROVED USES OF FUNDS - $5,106.2 (million)

*This total covers the full Operating Budget, and funds to the CIP, Debt Service, and Reserves. Of this amount $4,612,253,211 is approved in the Operating Budget.

FY13 EXPENDITURES BY FUNCTION

TAX SUPPORTED EXPENDITURES - $4,020.5 (million)

Non-Departmental $239.05.9% Montgomery College

$218.8 5.4%

Montgomery County Public Schools

$2,028.9 50.5%

Public Safety $568.0 14.1%

Health & Human Services $181.7 4.5%

Environment $1.5 0.1%

Libraries, Culture, &Recreation

$57.3 1.4%

General Government $164.5 4.1%

Debt Service $298.8 7.4%

Transportation $155.0 3.9%

M-NCPPC * $107.0 2.7%

TOTAL EXPENDITURES - $4,612.3 (million)

*Total M-NCPPC includes $4.8 million debt service.

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FY13 TAX SUPPORTED AGENCIES AND FUNDS

Net Transfers $38.70.9%

Prior Year Reserves $339.17.7%

Fines & Miscellaneous

$117.7 2.6%

Intergovernmental $693.7 15.7%

Charges for Services $72.4 1.6%

Other Taxes $304.1 6.9% Transfer &

Recordation Tax $136.6 3.1%

Income Tax $1,263.6 28.5%

Property Tax $1,462.2 33.0%

WHERE THE MONEY COMES FROMTOTAL APPROVED RESOURCES - $4,428.1 (million)

Non-Agency Uses $7.9 0.2%

County Government

$1,576.2 35.6%

M-NCPPC $107.4 2.4%

Reserves $327.9 7.4%

Montgomery College $241.4 5.5%

Montgomery County Public Schools

$2,167.3 48.9%

WHERE THE MONEY GOES *TOTAL APPROVED USES OF FUNDS - $4,428.1 (million)

*This total covers the full Operating Budget, and funds to the CIP, Debt Service, and Reserves. Of this amount $4,020,477,004 is approved in the Operating Budget.

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FY13 Tax SupportedExpenditures by Function

Tax Supported Expenditures Only Appropriation% of Total Cum % Workyears

1. MCPS 2,028,871,395$ 50.5% 50.5% 19,750.7 2. Public Safety 544,918,326$ 13.6% 64.0% 3,701.8 3. Debt Service 298,792,040$ 7.4% 71.4% - 4. College 218,786,599$ 5.4% 76.9% 1,711.1 5. Health and Human Services 181,733,135$ 4.5% 81.4% 1,117.1 7. Transportation 154,983,035$ 3.9% 85.3% 1,023.0 8. General Government & Other Functions 281,962,379$ 7.0% 92.3% 965.7 9. M-NCPPC (Park and Planning) 107,043,155$ 2.7% 94.9% 799.0 10. Retiree Health Insurance 134,482,024$ 3.3% 98.3% - 11. Libraries, Culture, & Recreation 57,342,437$ 1.4% 99.7% 686.7 12. Community Dev. and Housing 10,051,497$ 0.3% 100.0% 66.9 13. Environment 1,510,982$ 0.0% 100.0% 11.5

4,020,477,004$ 29,835.1

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Revenue Volatility: Income Taxes

8.2%11.0%

21.1%

2.1%0.0%

-19.3%

-0.3%

18.1%

3.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Est. FY13 Est.

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Est. FY13 Est.

Income Tax 940.859 1044.562 1265.377 1291.34 $ 1,291.72 $ 1,042.10 $ 1,039.23 $ 1,227.07 $ 1,263.96

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Revenue Volatility: Transfer & Recordation Taxes

133.7145.5

106.9

80.464.8

77.1 71.8 74.2 80.787.696.2

72.7

54.742.4 42.8

57.745.3

55.9

221.3

241.7

179.6

135.1

107.2120.0

129.5119.5

136.6

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Est. FY13 Est.

Transfer Tax

Recordation Tax

Total

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Est. FY13

Est.

Transfer Tax $ 133.7 $ 145.5 $ 106.9 $ 80.4 $ 64.8 $ 77.1 $ 71.8 $ 74.2 $ 80.7

Recordation Tax $ 87.6 $ 96.2 $ 72.7 $ 54.7 $ 42.4 $ 42.8 $ 57.7 $ 45.3 $ 55.9

Total $ 221.3 $ 241.7 $ 179.6 $ 135.1 $ 107.2 $ 120.0 $ 129.5 $ 119.5 $ 136.6

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Montgomery County Budget Growth Rates

14FYs 05-07 = 36.5% FYs 08-13 = 15.9%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

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Montgomery County Govt - Tax Supported

Total Tax Supported

Total Budget

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Montgomery County Govt - Tax Supported 11.0% 11.4% 14.1% 6.7% 1.5% -2.2% -7.0% 5.1% 11.8%

Total Tax Supported 8.1% 8.3% 9.8% 7.4% 3.7% 1.6% -5.0% 3.5% 6.2%

Total Budget 7.4% 7.7% 9.0% 7.2% 4.3% 3.0% -4.5% 2.2% 5.6%

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Operating Budget Rate of Growth

FY13 FY08-13FY08 FY12 Approved FY12-13 Average

Tax Supported Budgets Approved* Approved* Budget* % Change % ChangeMontgomery County Government $1,248,525,220 $1,175,833,680 $1,264,964,241 7.6% 0.3%Montgomery County Public Schools $1,836,100,947 $1,950,909,291 $2,028,871,395 4.0% 2.0%Montgomery College $196,811,472 $218,004,776 $218,786,599 0.4% 2.1%Md National Park & Planning Commission $101,892,900 $99,017,030 $103,678,655 4.7% 0.3%

Subtotal Tax Supported Agency Expenditures $3,383,330,539 $3,443,764,777 $3,616,300,890 5.0% 1.3%

Debt Service $239,480,290 $291,574,070 $298,792,040 2.5% 4.5%

Total Tax Supported Expenditures $3,622,810,829 $3,735,338,847 $3,915,092,930 4.8% 1.6%

FY08 to FY13 Operating Budget Agency Rate of Growth*

* Excluding funds for pre-funding retiree health insurance. The FY13 County Government tax supported appropriation includes a total contribution of $102.0 million, including contributions of $58.9 million on behalf of Montgomery County Public Schools and $1.8 million on behalf of Montgomery College. The Park & Planning Commission tax supported appropriation includes a contribution of $3,364,500.