County Budget Memo

NDACo BUDGET MEMO For CY2019 Budgets

To help counties in their budgeting efforts, we at NDACo have compiled county-specific analyses of projected State Aid, State Highway Funding and a variety of other revenues along with some anticipated expenditures. We have sent this one-page, county-specific analysis to each county, however, it is most effective if it is used in conjunction with the narrative below.

This Budget Memo includes brief notes about the assumptions and qualifications of various budget items. We have also identified other budget issues that we think may warrant consideration.

As always, please remember that these are estimates and relative changes in valuation, taxable sales, population, staffing levels, motor vehicles, etc., may affect some of the actual revenues and costs in the next year. You will recall that our initial estimates for State Aid and highway funding were well off the mark for CY2016; and while we use the latest and best data available, everything must be tempered with your own judgement.

NDACo has provided this service since 1991. We hope you find it useful. As always, we welcome your input if we can make this annual communication more useful.

 

 

REVENUES

 

STATE AID DISTRIBUTION FUND

Recognizing rapidly changing populations in some jurisdictions, the State requires the use of official Census Bureau estimates for state aid distributions beginning July 2015 through at least the biennium ending June 2021. This means each October during that period, the Treasurer’s Office “rolls in” the previous year’s census estimates, effectively resulting in annual incremental adjustments among counties and cities rather than a larger one at the end of the decade. The current dedication of 43.5% of a penny of state sales tax (rather than 40.0 %) into this fund, which was implemented in 2013, will continue.

As in the past, we are using the Tax Department’s sales, use and motor vehicle tax estimates as the foundation for this projection. The Tax Department generates these in conformance with the assumptions used by OMB and the state’s economic advisor. The results therefore will only be as accurate as those assumptions.

Your county’s estimated funding for all of CY2018 and our projection for CY2019 do take the census adjustments into account and are included in the county-specific memo. As so many counties have seen townships become unorganized since 1997, we have left the “net of township share” figure out of these estimates, therefore the figures reflect the total “rural share”. The language below explains how the townships’ “percentage share” is to be determined. While the Legislature has taken a (mostly) “hands-off” approach to this Fund since 1997, any dramatic change in consumer spending will affect this fund as it affects the state’s budget.

As noted in the past, only counties and cities receive direct allocations from this program – NDCC 57-39.2-26.1 states:

“A county shall deposit all revenues received under this subsection in the county general fund. Each county shall reserve a portion of its allocation under this subsection for further distribution to, or expenditure on behalf of, townships, rural fire protection districts, rural ambulance districts, soil conservation districts, county recreation service districts, county hospital districts, the Garrison Diversion Conservancy District, the southwest water authority, and other taxing districts within the county, excluding school districts, cities, and taxing districts within cities. The share of the county allocation under this subsection to be distributed to a township must be equal to the percentage of the county share of state aid distribution fund allocations that township received during calendar year 1996. The governing boards of the county and township may agree to a different distribution.”

The common interpretation of this language is that the individual amounts that counties “pass-through” to the other jurisdictions and to special funds within the county, are totally in county commission control, with the exception of organized townships. Townships must receive their proportionate share, unless they agree with the county to a “different distribution.”

Our understanding of the purpose of this “different distribution” language is to allow the possibility for creatively assisting townships; for example, “writing down” the cost of township road maintenance was suggested in one of the committee hearings as a possible way of dedicating the township portion. When a township becomes unorganized, their proportional State Aid amount should remain in the county general fund. The amounts on the county-specific schedule indicate the “total county amount” that we project will be allocated to each county including the township share. Questions on our projections can be directed to Terry Traynor.

STATE HIGHWAY DISTRIBUTION FUND

Although there have been no formula changes made to the State Highway Distribution Fund in the last six years, we saw significant growth from 2010 to 2015, and then a fairly steep slide in both fuel taxes and motor vehicle registration fees. We, like the state, have struggled with how best to estimate the overall adjustment due to recent trends.

As each county’s share is driven by the actual number of vehicles registered in that county and the county’s urban vs. rural population, the projections will vary somewhat from county to county, although we are projecting very little change overall – consistent with the state’s projections. Our county-level projections, based on past trends, are included on the county-specific data sheet. Questions on these projections can also be directed to Terry Traynor.

ONE-TIME HIGHWAY FUNDING

As everyone is aware, the Legislature provided significant “one-time funding” to counties for local road construction and repair in the previous several sessions. However, with the current state budget situation and the lack of funding flowing into the “Strategic Investment & Improvements Fund” (SIIF), the Legislature did not find it possible to direct one-time funding to local road infrastructure. NDACo will continue to push for this and urges all counties to continue the data maintenance that feeds the UGPTI monitoring of county road investments, so we can again seek this support in the 2019 Session.

TOWNSHIP ROAD FUNDING

Everyone is aware that the legislatively-appropriated one-time funding for organized and unorganized township roads was vetoed by the governor. This is not a subject of the on-going “veto lawsuit,” so no township funding beyond their direct share of the Highway Distribution Fund will be available – at least until the Legislature meets in early 2019.

SENIOR MILL LEVY MATCH

The 2015 Legislature readjusted the formula for this program, increasing the amount of state funding distributed from 85% of a mill to 87.5%. They also amended the language of this statute, providing a match equal to the amount appropriated by the county for this purpose, up to the value of one mill. Therefore, a county is no longer required to levy the mill, if they have other revenues available to demonstrate the match. This may make projections a bit more difficult going forward, but certainly adds flexibility to the county budgeting process. For each county-specific data sheet, we have included the CY2018 actual distribution, contrasted with our calculation of the maximum CY2019 distribution. This calculation is based on 87.5% of your TY2017 mill value and the assumption that each county budgets sufficient funds to trigger the maximum match – obviously some counties may budget less.

CLERK OF COURT FUNDING

For those counties that contract with the Supreme Court to provide clerk of court services, the new contract amounts took effect July 1, 2017 for the entire biennium. The monthly reimbursements therefore were fixed for this year, but will change July 1, 2019. The amounts are based on the updated time-study and salary information finalized and reported to the clerks. The figures in the county-specific data sheet compare the current rate for CY2018 with the “blended” amount of the current and new contracts for beginning July 1, 2019.

SOCIAL SERVICE FUNDING

By now, counties should have received notice of their specific funding amount for 2019 social service costs from the State, which will come as two payments – one in January and one in June. The June payment may be adjusted (like this year) up or down, if the county’s CY 2018 caseload calculation results in a block grant amount that varies by more than 5% from the current calculated amount. As previously reported, the passage of SB2206 suspended the county 20-mill social service levy for two years, and the block grant payment to each county (or multi-county social service unit) is keyed to actual CY2015 expenditures. This reduces county costs (from 2016) by an estimated $78 million annually; however, some counties anticipate that the block grant will be slightly less than the actual budgetary needs for the county agency. This will impact each county uniquely, driven by historic staffing patterns, salary and fringe levels, caseloads and other factors. The county can transfer funds from its General Fund if it determines that is necessary.

Additionally, the legislation required that monies in the Social Service Fund in excess of a specific threshold must be transferred into the County General Fund on January 1, 2018. The thresholds triggering this transfer are based on each county’s (or multi-county unit’s) CY2015 social service expenditures. If those expenditures were less than $2 million, the threshold is $100,000; if the county’s expenditures were more than $2 million, the threshold is $500,000. The amount transferred is to REDUCE the county’s tax year 2018 levies. If a county’s (or unit’s) social service fund balance exceeds the threshold at the end of CY2018, their block grant amount will be reduced by the amount over the threshold. Each county’s or unit’s grant amount has been provided to the social service agency.

INDIRECT COST PLANS (REIMBURSEMENTS & FEES)

You will recall from last year’s memo, due to SB2206, the “cost plan process” remains the same during the CY2018 and CY2019 pilot project, but the allocation of costs and revenues changes. Pursuant to SB2206, for the two-year pilot project, 25% of each county’s countywide indirect expenditures as well as payments in lieu of rent (average of previous three years) will be included in the county social service “lump sum” payment discussed above. While counties will still need to cooperate with Abacus on the completion of the plans, the state will be paying for 100% of plan development fees. As counties historically collected about 25% of their eligible indirect costs, but also paid the plan development fee, this is actually a bit of a net gain for counties; but since it is incorporated in the lump sum payment, it won’t be easily identified.

RESTITUTION FEES

Since 2003, state law has provided a revenue source for counties in which county staff members are responsible for restitution collection related to bad checks. In the four largest counties, the state’s attorney’s office is responsible for this function. In the counties with “county-employed” clerks, the clerk of court is generally responsible. NDCC 12.1-32-08(2) now requires that the court impose as costs the greater of the sum of ten dollars or an amount equal to twenty-five percent of the amount of restitution ordered. The costs imposed…may not exceed one thousand dollars.” Counties that have state-employed clerks (other than the largest four) will not receive funding from this fee, as the state will receive the revenue since state employees are responsible for the administration of restitution. However, the statute goes on to state that the “state's attorneys and county-employed clerks of district court shall remit the funds collected as costs under this subsection to the county treasurer to be deposited in the county general fund.”

COURT FACILITIES GRANTS

State law governing court fees and costs associated with criminal convictions includes a provision dedicating a significant share of those revenues to the county grant program for court facilities improvement and maintenance. Grant applications, we expect, will be due no later than December 31, 2018 with awards in January or February of 2019. The rules adopted for this grant program require that the funds be for an “improvement or maintenance project that is a necessary improvement to court facilities or essential to remodel or maintain existing court facilities.” The grant program requires a 25% local match.

9-1-1 FEE REVENUE & EXPENDITURES

The Next Generation 9-1-1 network transition is being implemented as planned, and the contract costs are being managed so that the cost reduction implemented last year will remain in effect. The network costs will remain at 10% of the first $1 of the fee.

  County A County B
Current Local Fee $1.00  $1.50 
New State Fee $0.50  $0.50 
Total Fee as of July 1, 2017 $1.50  $2.00 
Factors to calculate remittance from total revenue collected
State Fee to State Treasurer (1) 33.00%  25.00% 
NG911 Network Fee to NDACo (2) 6.70%  5.00% 

Notes: (1) All revenue collected from the new 50-cent fee

2. 10% of the first dollar of the local fee

In HB1178, the Legislature created an additional monthly fee of 50 cents on all types of telecommunication services – Landline, Wireless (Cell) and Voice over Internet Protocol (VoIP). This state fee is effective from July 1, 2017 through July 31, 2023. Therefore, those jurisdictions levying a $1.00 “local” fee saw collections increase by 50% ($1.50) and those levying a $1.50 “local” fee saw their collections go up by a third ($2.00).

This new revenue is remitted to the State Treasurer by all local entities collecting. As the telecom providers were “held harmless” by the legislation, they are allowed to continue to retain their “actual costs of administration in collection of the fee…not to exceed five percent of the fee collected.” As with some providers it is difficult to determine what amount they are retaining, it seems that it will be easiest to calculate the appropriate remittances by applying a percentage calculation to your total revenue collected. If your jurisdiction chooses to use this method, we have provided examples above. Obviously, if your jurisdiction adjusts the local fee to something other than $1.00 or $1.50, the percentages would change.

JUVENILE JUSTICE FUNDING

  • Attendant Care Reimbursement: The North Dakota Division of Juvenile Services and the ND Juvenile Justice Advisory Group have agreed to continue to use federal funds received under the Juvenile Justice and Delinquency Prevention Act for the statewide Attendant Care Program. Based on Congressional funding levels, program reimbursement will be provided solely for the direct costs of operation as in the past several years. Costs associated with administration and overhead, including costs of a third-party provider, will now need to be budgeted by the county. Lisa Jahner is the contact for additional information.
  • Juvenile Transportation: County sheriff’s departments are able to apply for reimbursement of costs related to the transport of juveniles in state custody (NDCC 27-20-49(2)). This funding can be applied for through the ND Dept. of Corrections and Rehabilitation. The current reimbursement is 29 cents per mile for staff time plus the state mileage rate. Since 2009, the state mileage rate has been equal to the mileage rate established by the U.S. General Services Administration (i.e. Federal GSA rates) so it can vary throughout the year. OMB posts the mileage rate on their website as it changes, and NDACo will continue to coordinate a notice to all counties when changes are made. Call Lisa Jahner with any questions.

     

STATE PROGRAM COSTS

 

MARCY’S LAW/SAVIN COST ALLOCATION – NEW 2018 REQUIREMENT

The passage of the Marcy’s Law” constitutional amendment by the voters, as anticipated, has increased county responsibilities (and costs) for notifying victims of all crimes. Counties and cities were mandated by the Legislature to collectively contribute $315,000 to match $500,000 in the Attorney General’s budget for an upgrade to the state’s electronic victim notification system (SAVIN). Cities with municipal courts and every county will be assessed a share of this cost. As this is an unexpected cost in a time of great fiscal constraints, efforts are underway to minimize the impact. Initially, the local share has been divided in half, with 50% to be collected in 2018 and the rest in 2019 – the amount for each year is included on the county-specific sheet. It is hoped that the investment in the enhancements to this automated notice system may reduce the need for counties to add staff to meet the Constitutional mandates.

SPECIAL OPERATIONS FUND

This optional “insurance” fund was created in the Attorney General’s Office by the Legislature to address the growing cost of deploying the Special Operations (SWAT) units maintained by several of the larger law enforcement agencies in the state. The Fund has been annually funded with a federal grant, and counties have been asked to contribute the necessary matching dollars. A population-based formula was created to generate the match.

Counties wishing to participate and, therefore, avoid being charged for the direct costs of special operations services (if needed), must contribute as indicated in the county-specific data sheet for 2019 – the same amount as last year. As in the past, NDACo will collect the funds on behalf of the Attorney General, so we will send an invoice shortly after the first of the year.

PROBATIONER RECOVERY FUND

This statutory, state-maintained fund was created (NDCC 12-65-08) to reduce and normalize county costs of recovering probationers from out-of-state locations. This fund receives $150 from every probationer requesting permission to relocate to another state; and for the first several years, the resident county was billed $150 if the request was approved by both North Dakota and the receiving state. The 2007 Legislature approved language in the Dept. of Corrections Budget Bill, permitting the agency to stop billing the counties when the special fund reaches a level of $75,000 at the end of a state fiscal year. The fund reached that level in 2006 and the county billings stopped in June of 2007. The fund remains at a level that DOCR will not begin billing in 2018 and currently does not anticipate a need to begin billing counties in 2019.

PUBLIC ADMINISTRATOR/GUARDIANSHIP FUNDING

The Legislature, in 2013, took a large step towards eliminating the ambiguous responsibility of counties for funding public administrators/guardians for indigent persons. Although the Legislature did not increase the appropriation for the 2017-18 biennial costs of this service, it did not cut the funding; and we currently hope that program reimbursement adjustments will allow for its continuation within the state funding budgeted. Barring legislative changes, NDACo will therefore NOT be requesting county contributions for this program in CY2019.

STATE RADIO 9-1-1 DISPATCH/TELETYPE FEES

For Teletype access and for counties that contract with State Radio for 9-1-1 dispatch, the agency analyzes their costs and addresses rates as part of their biennial budget-setting process in the Legislature. Therefore, they will be setting new rates that will become effective July 1, 2019. I have been assured that these rates will be communicated to the counties about June 1st of this year.

The existing rates below will remain in effect through June 30, 2019:

9-1-1 Dispatch 46¢/device per month

  1. Teletype (LETS) $367.25/terminal/month

ELECTION COSTS, EQUIPMENT & SOFTWARE

As County Auditors are assembling their budgets for 2019, even though there isn’t a scheduled election, the annual maintenance obviously still must be addressed. We anticipate that the Secretary of State’s Office will have information on those costs and any state cost-share by the time the Auditors meet in West Fargo at the end of June.

Recent legislative changes to “voted-on” levies necessitate a reminder for the future preparation of this budget memo, but also create an important long-term consideration for counties. Passage of SB2144 in 2015 dramatically restructured mill levy authorities for most political subdivisions. An over-arching change was that levy increases approved by the voters will be limited, in most cases, to a maximum of ten years. Voter approved levies in existence prior to January 1, 2016 will expire in ten years as well. This will require county and city auditors, township clerks, and others to keep track of which voter-approved levies will expire when – so they can be placed on the ballot if their continuation is desired.

 

PERSONNEL COST ISSUES

DRUG & ALCOHOL TESTING

For counties participating as part of the NDACo “testing pool” for the random drug and alcohol testing – required of Commercial Driver’s License (CDL) holders employed in “safety sensitive” positions – the random and pre-employment testing contract fees will remain the same for 2019. The “no show” fee, initiated for situations where the sampler is not informed ahead of time that an individual selected for a random drug or alcohol test will be absent or otherwise unavailable for testing, is still in effect.

Contract testers can no longer draw an "alternate name" for an individual who is unavailable to test. The individual must be tested when they return to work; they may be tested by the contractor or the county's local clinic. Also, it is very important for counties that have a "no-show" to document why the situation occurred (i.e. vacation, illness, work location, etc.). Otherwise, it may become an exception if the federal DOT should audit your testing program. In addition to no show fees, if the collector has a wait time (for shy bladder) or a county requests to be tested outside regular business hours (contractor travels before 8:00am – after 5:00pm), additional fees may apply. Drive time and mileage costs charged by the collectors will be a direct pass through expense to the counties, which is the same billing format as this year.

Remember, if new full-time, part-time, or temporary employees that meet the testing requirement are added to the county payroll, a “pre-employment” drug test is required by federal regulation. Our testing contractor will complete pre-employment testing, as well as post-accident and reasonable suspicion/cause at the same per-test rate; however, that is in addition to the annual fee for the random testing. The budget estimates on the county-specific data sheet anticipate no change in the number of employees in your local pool.

If any counties with CDL holders are not currently involved in a random testing program, we strongly encourage participation. An employer found to be out of compliance could face stiff fines and penalties. Contact Genny Dienstmann with questions.

WORKER’S COMPENSATION (CEG) PREMIUM ESTIMATES

NDACo’s County Employer Group (CEG) continues to work to provide the efficient risk and claims management services that will maintain the group’s excellent loss history and relatively low premiums. NDACo has accelerated its premium estimate process with WSI to provide each county with an earlier estimate of its 2019 premium. As this will necessarily reduce the loss data by a month or so, the uncertainty will increase to some degree. As you likely need to “plug in” something before that date, our county-specific data sheet, at this time, includes the CY2018 estimated premiums so you can begin the process. The CEG premium estimate should be available and emailed by the 15th of July.

NDPERS HEALTH INSURANCE PREMIUMS

For the 35 counties that purchase employee health insurance through the ND Public Employees Retirement System (NDPERS), the premiums negotiated by the state for the 2019-21 Biennium are important to your next year’s budget. As we’re pushing this memo out earlier than in past years, the potential adjustments to NDPERS Health premiums to be effective July 1, 2019 are even less certain. We are suggesting an “on-the-safe-side” estimate of 17% biennial increase in rates.

NDPERS RETIREMENT

As discussed over the last several years, investment losses to the PERS retirement fund prompted the Legislature to gradually increase the contribution level for all participants – state, county, city, public health, etc. Although discussed, the 2017 Legislature authorized no changes to the 2015 contribution levels, as outlined below. While it is likely that NDPERS will seek an enhancement to employer/employee contributions during the 2019 Session, past practice has been to start any change to county contributions the following January – hopefully this will mean no mid-year surprises.

NDPERS Retirement Contribution Levels
(Percentage of Employee Salary)

Jan. 1, 2015

Employer Share (Employer MUST Pay) 7.12%
Employer Share (Employer MAY Pay) 7.00%
Total 15.26%

While not a budgetary issue, it should be noted from a human resources perspective that employees enrolled in NDPERS retirement after December 31, 2015, will be covered by different rules for “early retirement.”

Employees hired before 2016 are governed by the “rule of 85” and an early retirement deduction of 6%. Employees hired in 2016 or after are governed by the “rule of 90” and an early retirement deduction of 8%.

STATE/COUNTY SALARIES

The 2017 Legislature DID NOT authorize an across-the-board increase to state employee salaries, so the “brackets” or minimums and maximums for each state salary class WILL NOT CHANGE in July of 2018. We point this out since “bracket adjustments” can impact county budgets, as federal law requires social service employees to be included in a merit system and currently all counties use the state’s merit system to meet the requirement – although state law (54-44.3-12.1) permits counties to delay this adjustment until the start of their next budget if they choose. Should the 2019 Legislature approve state salary increases, the impacts could be delayed until January 2020; however, some counties may choose to make adjustments sooner. Unfortunately, the governor has not suggested whether his budget will, or won’t, include salary adjustments.

STATE TRAVEL REIMBURSEMENT RATES

Mileage: NDCC 54-06-09 regarding use of an employee’s vehicle states: “The director of the office of management and budget shall adopt rules…to set reimbursement at the same rate as established by the United States general services administration for privately owned vehicles.”

While a county board can establish a higher mileage reimbursement rate (pursuant to 11-10-15), the state rate is the minimum that counties may reimburse. The OMB personnel reimbursement website http://www.nd.gov/fiscal/accounting/rates/ can be monitored for this “state rate;” however, NDACo will also work with OMB to track any changes and will continue to inform counties of changes as they occur. The current federal GSA rate (effective 01/01/2018) is $0.545 per mile – however, changes have been implemented each January 1st for the last several years. As this rate is driven largely by the price of gasoline, predicting what the rate will be in 2019 – well, your guess is as good as mine.

Lodging: NDCC 44-08-04 was amended to state that the director of the state Office of Management and Budget “establish a policy to set the lodging reimbursement amount equal to ninety percent of the rate established by the United States general services administration reimbursement in this state.” While a county board [pursuant to 44-08-04(2)(d)] can establish a higher lodging reimbursement rate (not to exceed actual costs), the state rate is the minimum that counties may reimburse for official government travel. The OMB website http://www.nd.gov/fiscal/accounting/rates/ will therefore need to be monitored; however, (as with the mileage rate) NDACo will continue to work with OMB to inform counties as changes are made.

State Lodging Rates by County Daily Rate
Williams, Mountrail, McKenzie $84.60
All Other Counties $83.70

The current (since Oct. 1, 2017) GSA rate of $93 results in a state rate of $83.70/night, with exceptions for travel in (currently) three oil-impacted counties listed in the table. These rates are also subject to periodic change due to GSA regional cost studies – the last several years, the changes have become effective in October – so it is likely these rates may change before you are into your next budget.

Meals: Although the Legislature has also discussed “indexing” the in-state meal rates, they have not yet taken that step – therefore, NDCC 44-08-04 continues to govern these reimbursement rates. The Legislature also made NO CHANGE this past session and the rates REMAIN at $7.00, $10.50, and $17.50 – effective for official travel after July 31, 2013 through June 30, 2019.

OUTLOOK VISION

In response to participants, NDACo will continue the two renewal and new enrollment dates for this excellent vision/hearing aid service discount program. Currently 96 county employees from 22 counties participate in NDACo’s Outlook Vision Services. The current enrollment period will end June 30th, and the next will be December 31st. The annual cost is, and has been for some time, $15 per household. We do not anticipate a change in this cost for the coming year. Since we started this service, a number of counties have offered it as a low-cost but highly-appreciated county benefit, while others are allowing employees to purchase the coverage individually. Cathy Heidt is the contact for this program.

APPOINTED BOARD COMPENSATION

In 2013, the Legislature amended 15 sections of law to make the compensation for members of virtually all appointed boards the same (with the exception of water boards). The statutes addressing compensation of the boards listed below now all state the following: “The appointing authority shall establish the rate of compensation for the board members and actual expenses incurred by the members may be reimbursed at the official reimbursement rates of the appointing authority.”

  • Airport Authority
  • County Weed Board
  • Co. Home Rule Charter Commission
  • County Jobs Development Authority
  • County Park Board
  • County Planning Commission
  • County Port Authority
  • County Commerce Authority
  • Housing Authority
  • County Vector Control Board
  • Boards of Health
  • Special Assessment Commission
  • Library Board
  • Multicounty Social Service Board
  • County Social Service Board
  • Co. Weather Modification Board

Water boards, by statute, establish their own compensation between $75 and $135 per day.

 

TECHNOLOGY COSTS

We have attempted to address several critical components to county technology costs and budgetary impacts that may need consideration in your upcoming budget.

 

STAGEnet WIDE AREA NETWORK ACCESS COSTS

The monthly cost for STAGEnet access will NOT CHANGE for counties effective July 1, 2019. Counties will see increased performance up to 100MB speeds beginning in the summer of 2019 without any price increase. Counties who have paid to increase their line speeds and bandwidth after March 22, 2018 will be grandfathered back to the price you were paying for your internet connections prior to that date.

  • Stand-alone circuits (10 Mbps) will remain $1,150/month.
  • Shared courthouse circuits (10 Mbps) will remain $490/month.
  • Shared courthouse fiber circuits will remain $510/month.
  • Counties with stand-alone fiber locations and individualized rates will also see no change.

 

COUNTY NETWORK SECURITY ENHANCEMENT PROJECT

Network security has never been more important, so NRG, with the assistance of ITD, is implementing the first major network design change in over 20 years. Phase 1 of the network security project will be completed by mid-2018 for ALL 53 COUNTIES. We were able to complete Phase 1 of the security project at NO COST to the counties. Originally we had asked the counties to budget anywhere from $5,000 to $20,000 depending on their size for Phase 1. We were able to negotiate and leverage ITD resources to complete this phase without any county expenditure.

Phase 2 will begin in the summer of 2018, and it deals with better securing your internal networks. We will be implementing a security assessment tool for counties to choose to better their security posture. It would be wise to carry over the funds we were able to save in 2018 for network security for Phase 1, and utilize those funds in 2019 for Phase 2.

MULTI-FACTOR AUTHENTICATION

Some state applications have enhanced their security policies and are now requiring multi-factor authentication (MFA) to access their applications. Counties that access these applications (including State Radio and CJIS applications) should budget a one-time fee of $30 per user (if they aren’t already subscribing to MFA) and an on-going monthly fee of $4.30 per user. These rates will also not change from those charged during the past biennium. The one-time fee covers the initial cost of the software license and a “hard token” (hardware device) which provides a constantly-changing, single-use password to access these applications.

TECHNOLOGY PLANNING & SUPPORT

While not a fixed cost for counties, we continue to encourage each county to carefully consider their technology planning and support needs for the coming year. ITD, with some assistance from NRG, will continue to manage the network to the “courthouse door.” Technology within the courthouse will continue to be a local responsibility. We are encouraging each county to budget funds necessary to ensure adequate technical support, whether it’s through various offerings from NRG Technology Services, another vendor, a staff person, or a combination of these. Many government and industry sources quote “the 70/30 rule,” which is the estimation that for effective use of your technology dollars, 70% of your investment should be in the planning, support, and training and 30% in hardware and software. Or, looking at it another way, for every $1 you plan to spend on hardware and software in the coming year, a little better than $2 should be budgeted for the technical staff or consultants necessary to get the most out of that hardware and software. NRG recommends replacing desktops at no less than every five years. Most counties replace their machines every four years. An average cost with the labor to install it can be estimated at $1,500 per machine. NRG recommends that laptops be replaced every three to four years. A typical laptop with installation will cost around $2,000 per machine.

 

ASSOCIATION SUPPORT/ILG TRAINING FEES

NDCCA DUES (County Commissioner)

The County Commissioners Association Board of Directors operate on a two-year budget cycle – recognizing the budget fluctuations that occur due to legislative sessions. As a result, the Board addresses their dues on even-numbered years. The NDCCA Board of Directors adjusted dues for CY2018, and will therefore NOT be adjusting their dues level for CY2019. The amounts are included in the county-specific data sheet. The total includes the county’s dues to the Western Interstate Region (WIR) of the National Association of Counties.

NDACo COUNTY DUES/CORE SERVICE SUPPORT

As detailed in previous years, the Association support formula is based 50% on valuation and 50% on average county revenues. (Both use a 10-year running average with the highest and lowest years thrown out.) To provide greater equity among the various county sizes, a minimum of one-third of the average paid by all of the counties and a maximum of five times the average were established. As each county’s relative valuation and budget change over time, a county’s relative dues share changes slightly each year. In recognition of the reduction in state revenues, the NDACo Executive Committee is again recommending that the overall dues not be increased, although each county will see some variation from last year due to their relative valuation and budget changes.

NACo (National Assoc.) MEMBERSHIP

Since the NACo Board of Directors incorporated the 2010 Census data into their formula for CY2014, they have kept the dues fixed as shown on the county-specific data sheet. As you may know, North Dakota counties have maintained 100% NACo membership for several years – giving our counties two seats on the NACo Board of Directors. Continuing this representation is very beneficial to keeping rural county issues on the forefront of the NACo agenda.

PEACE OFFICERS STANDARDS & TRAINING (POST) BOARD FEES

POST Board fees (mandatory for licensed law enforcement officers) are set by administrative rule (109-02-02-11) at $45 per officer for a three year licensing period. The POST Board has a staggered renewal process so generally the fee must be paid for only one-third of your officers each year, although rapid turnover can increase these costs. The application fee is $25.

OTHER COUNTY ASSOCIATION DUES

The following are the other County Official Associations that have members in the NDACo governance structure, and their CY2018 annual dues amounts – as most of these associations have not yet held their summer meetings, any adjustments they may make to CY2019 are not reflected.

PROFESSIONAL DEVELOPMENT FEES

In your budgeting efforts, we urge you to consider the benefits of continuing professional development for all county officials and employees, especially newly-elected or appointed officials. Currently, ILG offers a variety of training webinars which provides all participants a valuable educational experience. These professional development sessions are tailored specifically for local government at a reasonable price. Members enjoy the high quality, interactive webinars that allow them to conveniently participate from the privacy of their office, in addition to saving travel time and cost. Webinars are also attracting more county employees in addition to county officials. ILG offers training webinars throughout the year as well as on-site training at various member conventions, the NDACo Annual Conference and by county request. In addition, ILG records the webinars, which are available upon request. Members are recognized at the NDACo Annual Conference with awards once they achieve various ILG training hour levels (Hour Levels: 30 hours, 100 hours, 150 hours, 200 hours, 300 hours & 400 hours).

We encourage each county to set aside funds in its budget to allow county personnel to take part in ILG professional development. By doing so, constituents will benefit from the training their county officials receive. To continue and improve upon these efforts, we urge all county officials and personnel to support ILG, both financially and educationally. In 2019, the ILG training will be $30 per hour. We are urging each county to consider including $4,000 to $5,000 in its upcoming budget for ILG training.

NDACo CONFERENCE REGISTRATION

The 2019 Annual Conference dates are set for October 6-8 at the Bismarck Event Center. We anticipate registration fees will remain the same as 2018 rates. We will continue to offer a discounted registration category for “first-time attendees.”

2019 will be a “legislative year,” so NDACo will be holding its biennial County Officials Academy and Legislative Wrap-Up Conferences at the Heritage Center. Registration fees for these events will remain the same as 2017, which were $110 and $50 respectively.

 

OTHER ISSUES

CONSOLIDATED BUDGET MEETING NOTICES

As we have widely publicized (and strenuously opposed) starting this year (2018), the counties will be required to send EVERY TAXPAYER a consolidated “preliminary budget/tax notice” in August. This will need to include preliminary data from ALL taxing districts and will replace the “Truth in Taxation” statements currently sent by all major taxing districts to a subset of the taxpayers. Counties can bill the other major taxing districts for a portion of the direct costs associated with these statements; however it will undoubtedly increase county expenses in the area of programming, staff time, mailing and printing. Those taxing districts levying in excess of $100,000 may be looking to the county for an estimate of their share of the direct costs associated with this notice, as they must budget to pay the county.

AMBULANCE/EMS LEVY

In 2013, the Legislature amended NDCC 23-27-04.7 (below) to “clarify” what they had intended with a 2009 statutory change. After the 2002 mandate that the nearest (quickest) ambulance be dispatched to an emergency, the taxing district boundaries became (in many cases) significantly different from the service district boundaries. This prompted the Legislature to require counties to distribute ambulance/EMS levy dollars in a manner that didn’t follow the taxing district boundary. Several attempts have now yielded the following language:

23-27-04.7. County reporting - Use of property tax levies. The board of county commissioners of every county in this state shall conduct an annual review of the emergency medical services coverage within that county and shall submit an annual report to the state health officer in a format approved by the state department of health. A taxing district that levies a special emergency medical services or ambulance service levy shall allocate all of the special tax levy revenue collected in a particular township to the ambulance service that serves the largest area within that township.

ROAD MACHINERY LEASE-PURCHASE

The 2017 Legislature made NO CHANGES to the restrictions on counties with respect to the lease-purchase of road machinery. There is still no dollar-limit to the annual payments allowed; however, counties remain restricted to lease-purchase terms of a maximum of seven years.

STATE VEHICLE BID

As in the past, when the State Fleet Services Division bids cars, vans, pick-ups, and SUVs, the bid prices are generally extended to local government. The state bid prices and the successful bidders are posted each fall on the State Procurement website: https://apps.nd.gov/csd/spo/services/bidder/listCurrentContracts.htm . The current bid prices are available through September. Watch for our notice in the Leader Letter (usually November) that the successful bidders for next year are posted. Many of the state’s other purchase agreements are also open to local government, and that same website has information about those.

 

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I want to thank the NDACo staff and the various state agency personnel for making this informational material available. Our goal with this memo is to provide information that is useful to you and your county board. If there are other data items or pieces of budget information that you think we could collect and provide, please let us know.